CM-2026-082 - 3/27/2026 OPERATIONAL AGREEMENT
This OPERATIONAL AGREEMENT (this "Agreement") is entered into as of this 27 day of
March 2026 by and between Artists In Cellophane("AIC")and City of Round Rock ("Host").
WHEREAS, the mission of AIC is to encourage art consumption by expanding access to artists' work through
the combination of the worlds of art and commerce in an innovative form that allows art to be simultaneously
progressive,personal,and approachable; and
WHEREAS, AIC has created an opportunity to purchase original artwork while providing exposure and
promotional support for artists by converting retired cigarette vending machines into functional sculptures
("Art*o*mat Machines")that vend original works of art("Artpaks");and
WHEREAS, Host desires to acquire an Art*o*mat Machine.
NOW, THEREFORE, in consideration of the mutual promises and premises contained in this Agreement, the
receipt and sufficiency of which are hereby acknowledged,the parties hereto agree as follows:
1.
HOSTING
1.1. Machine.
(a) Installation. AIC will provide one stocked Art*o*mat Machine(the"Machine")which will be for
the Host Location (the "Location"). The Machine must not be relocated without AIC's prior
written consent,which consent may be freely withheld.
(b) Initial Fee. Host is to pay an initial fee (the "Installation Fee"), which Installation Fee includes
the following:
The Installation Fee is payable in two installments.The first installment of 50%is due upon
execution of this Agreement and upon receipt of invoice(net 30)from AIC.Production of the
machine will not begin until initial installment has been received.Delivery dates will be taken into
consideration.However,due to the nature of restoration/conversion,delivery dates will not be
guaranteed.The balance is due on the installation day of the Machine and upon receipt of invoice
(net 30)from AIC.
Preparation of the Machine - $3215
Shipment expenses - $900
Artworks- 110 works-5 per artist _ $385
TOTAL INSTALLATION FEE - $4500
(c) Title. AIC retains title to the Machine.
(d) Subcontracting. Host must not subcontract with any other person or entity to host the Machine at
the Location or any other location without AIC's prior written consent, which consent may be
freely withheld.
CM-2026-082
(e) Maintenance.
(i) Host must (1) present the Machine in a public accessible space and facilitate sales; (2)
supply the Machine with adequate electrical power; and(3)maintain the Machine and in
its original appearance through regular cleanings.
(ii) Host must not (1) permit any person not approved in writing by AIC to move the
Machine; (2)permit any person not approved in writing by AIC to alter,adjust,or tamper
with any mechanical or electrical functions of the Machine; or(3)permit any person not
approved in writing by AIC to perform mechanical or electrical maintenance or repairs on
the Machine.
(iii) In the event of a mechanical or electrical failure of the Machine, Host must immediately
contact AIC.If AIC determines that the failure can be corrected by Host,Host must make
a good faith effort to correct the failure. If AIC determines that the problem cannot be
corrected by Host,or if Host's good faith effort to correct the failure is unsuccessful,AIC,
or its designee, will, at AIC's convenience, perform the necessary repairs. If the
mechanical or electrical failure is due to the negligence of Host or any of Host's
contractors, agents, or employees, all repair costs, including reasonable travel expenses,
will be the responsibility of Host. Otherwise, repair costs will be the responsibility of
AIC.
(f) Termination. Upon termination of this Agreement, Host will return the Machine to AIC in its
original condition, less normal wear and tear, although Host may keep any Artpaks purchased
from AIC. Costs to ship the Machine to AIC and costs to repair any damages to the Machine will
Ibe split by Host and AIC.
1.2. Artpaks.
(a) Vend Price. Artpaks sold from the Machine may be sold at such retail price as may be set by AIC
and the Host(the"Vend Price").
(b) Purchasing Inventory. Only Artpaks supplied by AIC can be loaded into or vended from the
Machine. Host must purchase Artpak inventory directly from AIC by submitting a written order
via electronic mail or U.S.mail indicating the following: (1)the quantity of Artpaks; (2)the names
of preferred artists; and (3) the names of artists presently stocked in the Machine. The purchase
price for each Artpak is the greater of$3.50 or 70% of the Vend Price,plus shipping and handling
charges (the"Inventory Price"),which Inventory Price is subject to adjustment by AIC from time
to time upon thirty days written notice to Host. AIC will fill inventory purchase orders within ten
days of receipt and will submit an invoice to Host. If Artpaks by Host's preferred artists are not
presently in stock, AIC may make a comparable substitution, provided that no substitution
duplicates any artists presently stocked in the Machine. Payment in full on each invoice must be
received by AIC within thirty days of Host's receipt of such invoice. Except as provided in
Section 1.2(c),the Inventory Price will not be refunded to Host for any reason whatsoever.
(c) Inspection. Within ten days of Host's receipt of new Artpaks, Host may inspect all new Artpaks
and return any Artpaks that are defective, deemed offensive or inappropriate in Host's reasonable
discretion, or do not otherwise substantially conform to Host's reasonable commercial standards.
With respect to properly returned Artpaks,AIC must, at AIC's option, either promptly credit Host
for the initial purchase price of such returned Artpaks or promptly ship to Host at AIC's expense
an amount of replacement Artpaks equal in value to the initial purchase price of such returned
Artpaks. After Host has paid the invoice to AIC for such Artpaks or after the ten-day inspection
period has expired, whichever is earlier, Host will be deemed to have accepted such Artpaks and
AIC shall not be obligated to accept any returned Artpaks or issue any credits or replacement
Artpaks. Notwithstanding the foregoing, Host may revoke acceptance and return Artpaks to AIC
within a reasonable period of time with respect to any Artpaks that are found to be defective or
deemed offensive or inappropriate in Host's reasonable discretion or do not otherwise substantially
conform to Host's reasonable commercial standards; provided, however, that such defects,
offensiveness, inappropriateness, or nonconformity: (i) substantially impair the value to Host of
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such Artpaks; and(ii)were incapable of being discovered by Host during the aforementioned ten-
day inspection period without opening any Artpaks that are themselves closed containers.
(d) Columns. Artpaks must be loaded into the Machine in columns identified by artist (the
"Columns"). A placard for each Column will be supplied at no additional cost by AIC.
(e) Sales Reports. If during any given quarter of the calendar year Host ever sells Artpaks for a Vend
Price exceeding $5.00 per Artpak, then Host must provide AIC with complete and accurate sales
reports("Sales Reports") for such quarter. Each Sales Report must completely and accurately list
the number of Artpaks sold by artist for the quarter just ended and the average Vend Price for all
such Artpaks. The Sales Report for a given quarter shall be due to AIC within thirty days of the
end of such quarter. Host must promptly provide AIC with such other sales reports as AIC may
request from time to time.
(f) Royalties. If during any given quarter of the calendar year Host ever sells Artpaks for a Vend
Price exceeding$5.00 per Artpak,then Host must submit royalty payments to AIC with respect to
all Artpaks sold during such quarter as reported on the quarterly Sales Report required under
Section 1.2(e), such royalty payments being due concurrently with the submission of the
respective Sales Report. The royalty payment due with respect to a given Sales Report will be an
amount equal to the product of 0.70 times X times Y,where"X"is equal to the number of Artpaks
reported as sold on such Sales Report and"Y"is equal to the excess of the average Vend Price for
all such Artpaks over$5.00.
(g) Inventory Stocking. The Machine will be considered completely stocked when each column
contains 5 works by an individual artist. The Machine must be at least 50% stocked at all times.
Each Column must be at least 20% stocked at all times. As a practice to maintain a supply of
inventory,when a patron expresses interest,host will make an effort to convey the process of how
artists are invited to produce work to fill their venue's machine as well as other machines in the
AIC network.
(h) Tokens. If applicable. Upon Host's request, AIC will, at no cost to Host, provide Host with
Art*o*mat logo tokens (the "Tokens") to operate the Machine. AIC retains title to the Tokens.
Host is responsible for replacing lost or damaged Tokens at Host's expense.
(i) Art by Clark Whittington. If requested by AIC, artworks produced by Clark Whittington are to be
reviewed/considered for inventory alongside other participating artists.
1.3. Promotional Support. All promotional activities with respect to the Machine or the Art*o*mat project
generally (including, but not limited to, press releases, advertisements, gallery listings, website/social
media postings, flyers, direct mailings, social gatherings, seminars, workshops, formal presentations, and
explaining the project in person to a patron).must be approved in advance by AIC,which approval may be
freely withheld. Host should engage in an at least one approved promotional activity per month to
encourage continued interest in the Machine.
1.4. Optional Services and Materials. The following services and materials are available to Host and
permitted subcontractors of Host from AIC for such fees as AIC may establish from time to time: (a)AIC
sponsored workshops and seminars; (b) customized promotional materials; (c) assistance in soliciting and
negotiating with subcontractors to host the Machine; (d) design of artist Column placards; and (e)
distribution of t-shirts and other promotional products.
1.5. Intellectual Property. Host hereby acknowledges AIC's rights in and to all intellectual property associated
with the Machine, including but not limited to AIC's "ART-0-MAT" trademark, and all copyrights, utility
patents, and design patents that are or may have been incorporated into the Machine (collectively the "IP
Rights"). Host is hereby granted a non-exclusive license to use the IP Rights only as expressly provided by
this Agreement, only in connection with the Machine to which this Agreement pertains, and only in strict
accordance with the terms and conditions hereof. Host acknowledges that all use of the IP Rights by Host
pursuant to this Agreement shall inure to the sole benefit of AIC. Host agrees that it shall not attack, either
directly or indirectly,AIC's rights in or ownership of the IP Rights, or the validity thereof. Host further
agrees that it will not use, create, register, or attempt to register any copyright or trademark that is
substantially similar or confusingly similar to any of AIC's IP Rights.
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1.6. Host Contact. Host hereby designates to manage the Machine and to
serve as AIC's contact with Host (the"Host Contact"). If the Host Contact ceases his or her association
with Host,or if AIC reasonably requests that Host replace a given Host Contact,then Host must designate a
new Host Contact within two weeks of such cessation or request. AIC will, at AIC's expense, provide
initial training at the Location for the initial Host Contact upon installation of the Machine. Upon Host's
request, and as permitted by AIC's schedule, AIC will be available for any further training for the initial
Host Contact or any subsequent Host Contact at Host's expense, which expense will include AIC's fee of
$200 per day (one day minimum)plus all reasonable travel, food, lodging, and other incidental expenses.
If reasonably required by AIC from time to time, the Host Contact must, at AIC's expense, participate in
further training programs either at or from the Location. In the event that Host ever designates a new Host
Contact,Host will act in good faith to provide transition training to such new Host Contact.
1.7. Inspection. AIC may inspect the Machine for any purpose and at any time within Host's normal business
hours,with or without prior notice to Host.
1.8. Term. The initial term of this Agreement will commence on the date hereof and will conclude when it is
deemed best by Host and AIC. However, Host and AIC may terminate this Agreement upon thirty days
written notice.
2.
DISCLAIMER OF WARRANTIES
2.1. Disclaimer. AIC makes no warranties, express or implied, with respect to either the Machine or the
Artpaks,and specifically makes no warranties of merchantability or fitness for any particular purpose.
3.
MISCELLANEOUS
3.1. Notices. All notices, consents, requests,and other communications hereunder must be in writing and may
be sent by hand delivery, by certified or registered mail (return receipt requested), or by a recognized
national overnight courier service(that guarantees next day delivery)as set forth below:
If to AIC: If to Host:
Artists in Cellophane
5000 Rushland Drive
Winston-Salem,NC 27104
Attention: Clark Whittington
Notices delivered pursuant hereto will be deemed given: (a)if personally delivered,when so delivered; (b)
if mailed,two Business Days (as hereinafter defined) after having been sent by certified or registered U.S.
mail,return receipt requested,postage prepaid and addressed to the intended recipient as set forth above; or
(c)if sent through a nationally-recognized overnight delivery service that guarantees next day delivery,the
Business Day following its delivery to such service in time for next day delivery. As used herein,
"Business Day"means a day other than a Saturday,Sunday or other day on which commercial banks in the
state of North Carolina are authorized or required by law to close.
3.2. Assignment. This Agreement and all of the provisions hereof are binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted assigns, but neither this Agreement
nor any of the rights,interests or obligations hereunder can be assigned by any of the parties hereto without
the prior written consent of the other party.
3.3. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to
the matters addressed herein, and neither of the parties will be bound by any prior oral agreement,
condition,stipulation,representation,or understanding.
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3.4. Consent to Jurisdiction. Any action to interpret and/or enforce this agreement will be brought to and
maintained exclusively in the District or Superior court of the County/State opposite of the initiating party
Both parties irrevocably submit to the jurisdiction of said court.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date first
written above.
ARTISTS IN CELLOPHANE
By:
Name: Clark Whittington
Title:National Bureau Chief
HOST
By:
Name: Brooks Bennett
Title: City Manager
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