EXHIBIT 10.2
CONTRIBUTION AND ASSUMPTION AGREEMENT
This CONTRIBUTION AND ASSUMPTION AGREEMENT (this "Agreement") is entered
into as of July 25, 2005 (the "Effective Date"), by and among ZANN CORP., a
Nevada corporation ("Zann"), and Xxxxxx Xxxxxxx, an individual ("Xxxxxxx").
WHEREAS, pursuant to that certain Capital Stock Purchase Agreement between
Xxxxxxx or Xxxx as his nominee and several significant stockholders of Sartam
Industries, Inc., a Florida corporation ("Sartam"), dated June 27, 2005, Xxxxxxx
purchased 1,795,250 shares of the issued and outstanding common stock, par value
$0.01 per share, of Sartam (the "Sartam Common Stock") and 164,601 shares of the
issued and outstanding convertible preferred stock, second series, par value
$1.00 per share, of Sartam, (the "Sartam Preferred Stock") for a total purchase
price of $4,400,000; and
WHEREAS, in connection with the stock purchase transaction, Zann has agreed
to assume all liabilities of Xxxxxxx arising from that certain Capital Stock
Purchase Agreement between Xxxxxxx or Zann, as his nominee and stockholders of
Sartam, dated June 27, 2005, that certain Promissory Note between Xxxxxxx and
stockholders of Sartam, dated June 27, 2005; that certain Stock Pledge Agreement
between Xxxxxxx or Zann, as his nominee, and stockholders of Sartam, dated June
27, 2005, and that certain Escrow Agreement between Xxxxxxx or Xxxx, as his
nominee, Burgess, Harrell, Xxxxxxx, Xxxxx & Xxxxxx P.A. as the Escrow Agent and
stockholders of Sartam, dated June 27, 2005; and
WHEREAS, the selling stockholders of Sartam have previously agreed to such
assignment; and
WHEREAS, such assignment by Xxxxxxx to Zann and the assumption of liability
by Zann is expressly permitted by Section 20 of the Capital Stock Purchase
Agreement between Xxxxxxx or Xxxx as his nominee and stockholders of Sartam; and
WHEREAS, Xxxxxxx desires to contribute the Sartam Common Stock and the
Sartam Preferred Stock to Zann as a contribution to Zann's capital; and
WHEREAS, Zann desires to accept such contribution from Xxxxxxx in exchange
for the assumption of all liability arising from that certain Capital Stock
Purchase Agreement between Xxxxxxx or Zann, as his nominee and stockholders of
Sartam, dated June 27, 2005, that certain Promissory Note between Xxxxxxx and
stockholders of Sartam, dated June 27, 2005; that certain Stock Pledge Agreement
between Xxxxxxx or Zann, as his nominee, and stockholders of Sartam, dated June
27, 2005, and that certain Escrow Agreement between Xxxxxxx or Xxxx, as his
nominee, Burgess, Harrell, Xxxxxxx, Xxxxx & Xxxxxx P.A. as the Escrow Agent and
stockholders of Sartam, dated June 27, 2005;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Contribution. Xxxxxxx hereby contributes to Zann the Sartam Common
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Stock and the Sartam Preferred Stock, owned by Xxxxxxx.
2. Assumption. Zann hereby assumes any and all liabilities from any
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and all claims of any kind or nature whatsoever arising from that certain
Capital Stock Purchase Agreement between Xxxxxxx or Xxxx, as his nominee and
stockholders of Sartam, dated June 27, 2005, that certain Promissory Note
between Xxxxxxx and stockholders of Sartam, dated June 27, 2005; that certain
Stock Pledge Agreement between Xxxxxxx or Xxxx, as his nominee, and stockholders
of Sartam, dated June 27, 2005, and that certain Escrow Agreement between
Xxxxxxx or Zann, as his nominee, Burgess, Harrell, Xxxxxxx, Xxxxx & Xxxxxx P.A.
as the Escrow Agent and stockholders of Sartam, dated June 27, 2005. In
addition, Zann hereby promises to reimburse Xxxxxxx for the $200,000 cash
payment, delivered by Xxxxxxx to the stockholders of Sartam upon the closing of
the stock purchase tansaction.
3. Indemnification. Zann hereby agrees to indemnify, defend and hold
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harmless Xxxxxxx and his heirs, personal representatives, successors, and
assigns of any of the foregoing from and against any expense, cost or liability
(including, without limitation, fees and expenses of consultants, expert
witnesses, investigators, and attorneys and costs of court) resulting from any
and all claims, demands or causes of action, of whatever kind or character,
which might be alleged against Xxxxxxx with respect to or resulting from that
certain Capital Stock Purchase Agreement between Xxxxxxx or Xxxx, as his nominee
and stockholders of Sartam, dated June 27, 2005, that certain Promissory Note
between Xxxxxxx and stockholders of Sartam, dated June 27, 2005; that certain
Stock Pledge Agreement between Xxxxxxx or Xxxx, as his nominee, and stockholders
of Sartam, dated June 27, 2005, and that certain Escrow Agreement between
Xxxxxxx or Zann, as his nominee, Burgess, Harrell, Xxxxxxx, Xxxxx & Xxxxxx P.A.
as the Escrow Agent and stockholders of Sartam, dated June 27, 2005.
4. Miscellaneous Provisions.
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(a) Zann's Representations and Warranties. Zann represents and
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warrants to Xxxxxxx that Xxxx has full and lawful authority to enter into this
Agreement and to perform all obligations required to be performed by Zann under
this Agreement.
(b) Benefit. All the terms and provisions of this Agreement shall
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be binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
(c) Amendments. No amendment, modification or waiver of this
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Agreement shall be effective unless the same is in writing and signed by the
person against whom such amendment is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written above.
ZANN CORP.
By
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Xxxxxx Xxxxxxx, President
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XXXXXX XXXXXXX
Attachment:
Exhibit A - Stock Power
Exhibit A
Assignment of Stock Separate From Stock Certificate
The undersigned does hereby assign and transfer to Zann Corp. 1,795,250
shares of the issued and outstanding common stock, par value $0.01 per share,
and 164,601 shares of the issued and outstanding convertible preferred stock,
second series, par value $1.00 per share of Sartam Industries, Inc., a Florida
corporation (the "Company") standing in my name on the books and records of the
Company, represented by Certificate Numbers 74, 130, 131, 44, 40, 43, 45, 136,
137, 290, 201, 204, 278, 204, 309, 43, 134, 135, 39, 75, 132 and 133, and
irrevocably appoint the officers of the Company as my attorney-in-fact for the
sole purpose of transferring the shares of such stock on the books and records
of the Company. Except as otherwise appearing on the face of the certificate, I
represent and warrant that I am the sole and lawful owner of the shares of such
stock, and that they are all of the shares of such class that I own in the
Company. I bind myself, my heirs, and assigns to warrant and defend forever the
title to such shares to the transferee, his successors and assigns against any
lawful claims.
Dated: 7/25 , 2005
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WITNESS:
/s/ Xxxxxx Xxxxxxx
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Signature
XXXXXX XXXXXXX
Printed Name
