Unassociated Document


    
      
        

      

    

     

    SERIES
      C PREFERRED STOCK PURCHASE AGREEMENT

     

    February
      3, 2006

     

    David
      Weiker, Sr. (the "Purchaser")
      hereby
      purchases from Robert Simpson (the "Seller"),
      and
      the
      Seller hereby sells to the Purchaser 10,000,000 shares (the "Shares")
      of
      Series
      C Preferred Stock, par value $0.001 ("Preferred
      Stock") of
      Zann
      Corp., a Nevada corporation (the "Company"),
      for
      an
      aggregate purchase price of $500,000.00 (the "Purchase
      Price"), which
      amount shall be payable by means of Purchaser's payment to Seller of a $50,000
      in cash, which amount Purchaser has previously paid to Seller as a
      non-refundable deposit, and Purchaser's delivery to Seller of that certain
      secured interest bearing promissory note in the original principal amount of
      $450,000 (the "Note"), a copy of which is annexed hereto as Exhibit
      A.
      The
      Purchaser acknowledges receipt of a stock certificate representing the Shares
      (a
      copy of which is annexed hereto as Exhibit
      B)
      and the
      Seller acknowledges receipt from the Purchaser of the Purchase
      Price.

     

    1. 
       Acknowledgement
      Regarding Purchase Price. The
      Purchaser acknowledges that the Purchase Price is not based on an independent
      valuation of the Shares and may not reflect the fair market value of the Shares.
      The Purchaser acknowledges that the Company may immediately sell additional
      equity at a lower valuation or may be acquired in a transaction that values
      its
      Common Stock at a lower valuation than the Purchase Price. The Purchaser further
      acknowledges that neither the Seller nor the Company has made any
      representations and warranties to the Seller with respect to the Purchase Price
      or the transactions contemplated herein, that the Purchaser's decision to enter
      into the transactions contemplated herein is based on the Purchaser's own
      evaluation of the risks and merits of the Company's business activities, and
      that the Purchaser assumes the risk that the Purchase Price may not reflect
      the
      fair market value of the Shares or the value of the Shares pursuant to any
      other
      valuation basis.

     

    2.  
      Investor
      Representations. The
      Purchaser hereby represents and warrants to the Seller as follows:

     

    (a) 
      Accredited
      Investor. I
      am an
      "accredited investor" within the meaning of Regulation D, Rule 501(a),
      promulgated by the Securities and Exchange Commission under the Securities
      Act
      of 1933, as amended (the "Securities
      Act"), and
      shall
      submit to the Company such further assurances of such status as may be
      reasonably requested by the Company.

     

    (b) 
      I
      am
      Purchasing for Investment. I
      am
      purchasing the Shares solely for investment purposes, and not for further
      distribution. My entire legal and beneficial ownership interest in the Shares
      is
      being purchased and shall be held solely for my account, except to the extent
      I
      intend to hold the Shares jointly with my spouse. I am not a party to, and
      do
      not presently intend to enter into, any contract or other arrangement with
      any
      other person or entity involving the resale, transfer, grant of participation
      with respect to or other distribution of any of the Shares. My investment intent
      is not limited to my present intention to hold the Shares for the minimum
      capital gains period specified under any applicable tax law, for a deferred
      sale, for a specified increase or decrease in the market price of the Shares,
      or
      for any other fixed period in the future.

     

    (c) 
      I
      Know the Shares are Restricted Securities. I
      understand that the Shares are "restricted securities" in that the sale of
      the
      Shares to me has not been registered under the Securities Act in reliance upon
      an exemption for non-public offerings. In this regard, I also understand and
      agree that:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (d) 
      I must hold the Shares indefinitely, unless any subsequent proposed resale
      by me
      is registered under the Securities Act, or unless an exemption from registration
      is otherwise available (such as Rule 144);

     

    (e) 
      the
      Company is under no obligation to register any subsequent proposed resale of
      the
      Shares by me; and

     

    (f) 
      the
      certificate evidencing the Shares will be imprinted with a legend which
      prohibits the transfer of the Shares unless such transfer is registered or
      such
      registration is not required in the opinion of counsel for the
      Company.

     

    (g) 
      /
      am
      Familiar With Rule 144. I
      am
      familiar with Rule 144 adopted under the Securities Act, which in some
      circumstances permits limited public resales of "restricted securities" like
      the
      Shares acquired from an issuer in a non-public offering. I understand that
      my
      ability to sell the Shares under Rule 144 in the future is uncertain, and will
      depend upon, among other things: (i) the availability of certain current public
      information about the Company; (ii)
      the
      resale occurring more than one year after my purchase and full payment (within
      the meaning of Rule 144) for the Shares; and (iii)
      if I am
      an affiliate of the Company, or a non-affiliate who has held the Shares less
      than two years after my purchase and full payment: (A) the sale being made
      through a broker in an unsolicited "broker's transaction" or in transactions
      directly with a market maker, as said term is defined under the Securities
      Exchange Act of 1934, as amended, (B) the amount of Shares being sold during
      any
      three month period not exceeding the specified limitations stated in Rule 144,
      and (C) timely filing of a notice of proposed sale on Form 144, if
      applicable.

     

    (h) 
      / Know
      Rule 144 May Never be Available. I
      understand that the requirements of Rule 144 may never be met, and that the
      Shares may never be saleable. I further understand that at the time I wish
      to
      sell the Shares, there may be no public market for the Company's stock upon
      which to make such a sale, or the current public information requirements of
      Rule 144 may not be satisfied, either of which would preclude me from selling
      the Shares under Rule 144 even if the one-year minimum holding period had been
      satisfied.

     

    (i) 
      I
      Know I am Subject to Further Restrictions on Resale. I
      understand that in the event Rule 144 is not available to me, any future
      proposed sale of any of the Shares by me will not be possible without prior
      registration under the Securities Act, compliance with some other registration
      exemption (which may or may not be available), or each
      of the
      following: (i) my written notice to the Company containing detailed information
      regarding the proposed sale, (ii) my providing an opinion of my counsel to
      the
      effect that such sale will not require registration, and (iii) the Company
      notifying me in writing that its counsel concurs in such opinion. I understand
      that neither the Company nor its counsel is obligated to provide me with any
      such opinion. I understand that although Rule 144 is not exclusive, the Staff
      of
      the SEC has stated that persons proposing to sell private placement securities
      other than in a registered offering or pursuant to Rule 144 will have a
      substantial burden of proof in establishing that an exemption from registration
      is available for such offers or sales, and that such persons and their
      respective brokers who participate in such transactions do so at their own
      risk.

     

    (j) 
      Residence.
      The
      address of my principal residence is set forth on the signature page
      below.

     

    3.  
      Seller
      Representations. The
      Seller hereby represents and warrants to the Purchaser as follows:

     

    
      
        
        

      

      
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    (a)  
      Authorization; Enforcement, (a)
      The
      Seller has the requisite power and authority to enter into and perform this
      Agreement and to sell the Shares in accordance with the terms hereof, (b) no
      consent or authorization of any party is required for the Seller to execute
      and
      deliver this Agreement and to consummate the transactions contemplated hereby,
      including the transfer of the Shares, and (c) this Agreement constitutes a
      valid
      and binding obligation of the Seller enforceable against the Seller in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally the enforcement of creditors'
      rights and remedies or by other equitable principles of general
      application.

     

    (b)  
      Ownership
      of Common Shares. Seller
      is
      the sole record and beneficial owner of the Shares. The Shares are validly
      issued and fully paid and nonassessable. The Shares are free and clear of any
      lien, encumbrance, option, charge, equity or restriction, other than
      restrictions set forth herein; provided,
      however,
      that
      the Shares may be subject to restrictions on transfer under state and/or federal
      securities laws as set forth herein. The sale of the Shares is not subject
      to
      rights of first refusal.

     

    (c)  
      No
      Conflicts of the Seller. The
      execution, delivery and performance of this Agreement by the Seller and the
      consummation by the Seller of the transactions contemplated hereby do not and
      will not conflict with, or constitute a default (or an event which with notice
      or lapse of time or both would become a default) under, or give to others any
      rights of termination, amendment, acceleration or cancellation of, any
      agreement, indenture, patent, patent license or instrument to which the Seller
      or any of its subsidiaries is a party, or result in a violation of any federal,
      state, local or foreign law, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations) applicable to
      the
      Seller or by which any property or asset of the Seller is bound or
      affected.

     

    (d)  
      Opportunity
      to Consult with Advisors. The
      Seller has properly evaluated the merits and risks of selling the Shares and
      can
      protect his own interests in this regard, whether by reason of his own business
      and financial expertise, the business and financial expertise of certain
      professional advisors unaffiliated with the Company with whom Seller has
      consulted, or Seller's preexisting business or personal relationship with the
      Company or any of its officers, directors or controlling persons.

     

    4.  
      No
      Right of First Refusal. The
      Company and the Seller hereby acknowledge that the Shares are not subject to
      any
      right of first refusal in favor of the Company or any other party.

     

    5.  
      Indemnification.
      Purchaser
      and Seller agree, and Purchaser shall cause the Company to agree, that all
      rights to indemnification now existing in favor of Seller as provided in the
      Company's articles of incorporation or bylaws, or otherwise, as in effect on
      the
      date of this Agreement, shall continue in full force and effect for a period
      of
      6 years after the date hereof; provided
      however, that,
      in
      the event any claim or claims are asserted or made within such six (6)-year
      period, all rights to indemnification in respect of any such claim or claims
      shall continue to disposition of any and all such claims. In the event that
      Seller becomes involved in any capacity in any claim, suit, action, proceeding,
      investigation or inquiry (including, without limitation, any shareholder or
      derivative action or arbitration proceeding) (collectively, a "Proceeding")
      arising out of or based upon this Agreement, the Note or the Security Agreement
      or arising out of the matters contemplated herein or therein, Purchaser agrees,
      and Purchaser shall cause the Company to agree, to indemnify, defend and hold
      Seller harmless to the fullest extent permitted by law, from and against any
      losses, claims, damages, liabilities and expenses in connection with any matter
      in any way relating to or referred to in this Agreement or arising out of the
      matters contemplated herein or therein. The foregoing indemnification clause
      shall be in addition to any rights that Seller may have.

     

    
      
        
        

      

      
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    6.  
      Assumption of Liabilities. Purchaser
      shall assure that after the date hereof the Company will discharge the
      liabilities of the Company listed as Exhibit
      C
      annexed
      hereto (the "Liabilities") as they mature and not allow the
      Liabilities to become delinquent or accrue penalties thereon.

     

    7.  
      Miscellaneous.
      This
      agreement shall be governed in all respects by the laws of the State of Nevada
      without regard to principles of conflicts of laws. The representations,
      warranties, covenants and agreements made in this agreement shall survive any
      investigation made by any party hereto and the closing of the transactions
      contemplated hereby. Except as otherwise provided in this agreement, the
      provisions of this agreement shall inure to the benefit of, and be binding
      upon,
      the successors, assigns, heirs, executors and administrators of the parties
      to
      this agreement. This agreement and the Note and their respective exhibits
      (including that certain Security Agreement, dated the date hereof, by and
      between Purchaser and Seller (the "Security Agreement")) constitute the full
      and
      entire understanding and agreement between the parties with regard to the
      subject matter hereof and thereof, and supersede all prior agreements, and
      no
      party shall be liable or bound to any other party in any manner by any
      warranties, representations or covenants except as specifically set forth herein
      or therein. Except as expressly provided in this agreement, none of this
      agreement, the Note or the Security Agreement, nor any term hereof or thereof
      may be amended, waived, discharged or terminated other than by a written
      instrument signed by the party against whom enforcement of any such amendment,
      waiver, discharge or termination is sought. The parties acknowledge and agree
      that the provisions of Sections 5 and 6 hereof shall survive the Closing. This
      agreement may be executed in any number of counterparts, each of which shall
      be
      enforceable against the parties actually executing such counterparts, and all
      of
      which together shall constitute one instrument. Facsimile copies of signed
      signature pages shall be binding originals.

     

    [SIGNATURE
      PAGE FOLLOWS]


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, this Series C Preferred Stock Purchase Agreement is executed
      effective as of the date first written above.

     

    
      	 	
              SELLER:

            
	 	 
	 	
              /s/
                Robert Simpson

            
	 	
              Seller's
                Signature

            
	 	 
	 	
              Robert
                Simpson

            
	 	
              Print
                Name

            


    

     

     

    
      	 	
              PURCHASER:

            
	 	 
	 	 
	 	
              /s/
                David Weiker, Sr.

            
	 	
              Purchaser's
                Signature

            
	 	 
	 	
              David
                Weiker, Sr.

            
	 	
              Print
                Name

            


    

    


    
      	 	
              Address
                of Purchaser's Principal Residence

            
	 	 
	 	
              1506
                Elfstone Ct

            
	 	
              Casselberry
                FL 32707