Exhibit 10.3 Spin Off Agreement
THIS SPIN-OFF AGREEMENT (the "Agreement") made as of this October 1, 2004
(the "Effective Date"), by and among; Xxxxxx Xxxx ("Xxxx"); Artwork & Beyond,
Inc. ("ARTWORK"), a Colorado corporation, with a principal address at 000-X
Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, XX 00000 and Artwork & Beyond, Inc. ("the
Sub"), a Delaware corporation and wholly owned subsidiary of ARTWORK, with a
principal address at 000-X Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, XX 00000.
INTRODUCTION
WHEREAS, ARTWORK is about to enter into an Exchange Agreement pursuant to
which persons (collectively, the "Shareholders), owning all of the issued and
outstanding shares of Advance Nanotech, Inc. ("ADNANO"), a Delaware corporation
desire to exchange all of their shares of the common stock of ADNANO for an
aggregate of 70,000,000 shares of the common stock and a rights agreement for a
further 1,910,000,000 shares of common stock of ARTWORK (hereinafter, the
"Exchange") with the result being that ADNANO will become a wholly owned
subsidiary of ARTWORK;
Whereas, as a condition of such Exchange Agreement ARTWORK is obliged to
dispose of it's wholly owned subsidiary. (Sub) and be "debt free";
Whereas, Xxxx and ARTWORK desire to enter into an agreement providing for
Xxxx to acquire the Sub and for Xxxx to assume all the outstanding liabilities
of ARTWORK.
Whereas, Xxxx'x acquisition of the Sub and the obligation to assume
outstanding liability is conditioned upon payments made to the Sub by the
Shareholders hereinafter
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be bound hereby, do mutually agree as follows:
1. Subject to the completion of the Exchange ARTWORK agrees to transfer to
Xxxx all the shares of the Sub owned by it representing all the issued and
outstanding shares of the Sub in consideration of Xxxx'x obligations set forth
in paragraph 2. Such transfer shall be made free and clear of all restrictions,
liens and encumbrances.
2. Xxxx agrees to accept such transfer and in consideration of the
transfer referred to above and subject to the further terms, conditions and
receipt of consideration Xxxx agrees to assume and pay for all existing
liabilities of ARTWORK existing or arising out of circumstances or events prior
to closing of the Exchange, any liabilities of Sub, and any claims arising out
of or in connection with the Spin-Off of sub to Xxxx, provided that if the
Liability is covered by an existing indemnity, ARTWORK shall first seek to
enforce its rights under such indemnity
3. In further consideration of Xxxx agreeing to acquire the shares of the
Sub and to assume and pay for the liabilities and claims set forth in Paragraph
2, ARTWORK shall require that the Shareholders agree to pay the Sub in the
aggregate $425,000 of which $100,000 shall be paid at closing of the Exchange
and the balance as follows:
30 days after closing $100,000
60 days after closing $100,000
90 days after closing $125,000
If any of the above post-closing amounts are not paid, then ARTWORK will
issue Xxxx 10,000 shares of its common stock per day. If any amount, which is
overdue, is not paid within thirty days of the date such payment is due, Xx.
Xxxx shall have the right to elect to cause the Exchange to be rescinded, in
which event, Shareholders irrevocably agree to vote their shares of ARTWORK and
take such other actions as may be reasonably necessary to cause such rescission,
upon which ADNANO shall be owned by Shareholders, rather than by ARTWORK and the
shareholders shall have no interest in ARTWORK. In no event however, shall any
prior payments made by shareholders be returned.
4. The transfer of shares in paragraph 1 shall take place within seven
business days after the closing of the exchange and is conditioned upon the
shareholders executing an agreement obligating them to make the payments
referred to in 3 above.
5. All notices, requests, demands, or other communications with respect to
this Agreement shall be in writing and shall be (i) sent by facsimile
transmission, (ii) or with respect of notices from the United States sent by the
United States Postal Service, registered or certified mail, return receipt
requested, or (iii) personally delivered by a nationally recognized express
overnight courier service, charges prepaid, to the following addresses (or such
other addresses as the parties may specify from time to time in accordance with
this Section
If to ARTWORK after closing
00xx Xxxxx, 000 0xx Xxxxxx, Xxx Xxxx, 00000-0000
Attention: Advance Nanotech, Inc
Director of Strategic Transactions
Fax: (000) 000 0000
(b) If to Xxxx or Sub: Xxxxxx Xxxx
000-X Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax (000) 000 0000
All such notices shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received on the earliest of (i) the day delivered
to such address by hand, if personally delivered; or sent by facsimile
transmission provided such transmission has been confirmed as sent, (ii) the
fifth (5th) business day following the date deposited with the United States
Postal Service, First Class postage prepaid, or (iii) the next business day
after shipment overnight by recognized courier service.
6. This Agreement shall be construed and enforced in accordance with the
internal laws of the State of New York without giving effect to the principles
of conflicts of law thereof.
7. This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, but all of which shall together constitute
one and the same Agreement.
8. No failure or delay on the part of the parties hereto to exercise any
right, power, or privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver nor shall any single or partial exercise of any
right, power, or privilege preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. All rights, powers, and
privileges granted herein shall be in addition to other rights and remedies to
which the parties may be entitled at law or in equity.
9. This Agreement, including any exhibits and Disclosure Schedules
attached hereto, sets forth the entire understandings of the parties with
respect to the subject matter hereof, and it incorporates and merges any and all
previous communications, understandings, oral or written as to the subject
matter hereof, and cannot be amended, waived or changed except in writing,
signed by the party to be bound thereby.
10. To the extent that any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted hereof and the remainder of such
provision and of this Agreement shall be unaffected and shall continue in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
Effective Date.
ARTWORK & BEYOND, INC.
By: _____________________________________
Name:
Title:
ARTWORK & BEYOND, INC.(THE SUB)
By: _____________________________________
Name:
Title:
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Xxxxxx Xxxx
