ARKONA, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
December 19, 2006 by and between Arkona, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxx, an individual (the "Investor"). In
consideration of the mutual covenants set forth herein, and other good and
valuable consideration, the Company and Investor hereby agree as follows:
1. Purchase of Securities
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1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
this Agreement, the Investor shall purchase, and the Company shall sell and
issue to the Investor, at the Closing (as defined below), 84,745 shares of
common stock of the Company (the "Shares"). The purchase price for the Shares
shall be $0.59 per Share, and the aggregate purchase price for the Shares shall
be $50,000 (the "Purchase Price").
1.2 Closing/Expiration of Offer. The closing (the "Closing") of the
purchase and sale of the Shares shall take place on a an agreed upon date within
three business days of the date hereof at the offices of Arkona, Inc. at 00000
Xxxxx Xxxxx Xxxxx Xxxxxxx, #000, Xxxxx Xxxxxx, Xxxx 00000. At the Closing, the
Company shall deliver to the Investor a stock certificate representing the
Shares and an executed counterpart of this Agreement against delivery to the
Company by the Investor of the Purchase Price and an executed counterpart of
this Agreement.
2. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Investor as of the date of this Agreement (or, if a
different date is stated in such representation and warranty as of such date) as
follows:
2.1 Due Authorization. All corporate action on the part of the Company
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company hereunder, and the authorization,
issuance (or reservation for issuance) and delivery of the Shares has been taken
or will be taken prior to Closing, and this Agreement constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
respective terms subject to applicable bankruptcy, insolvency, and other similar
laws affecting creditors' rights, and rules of law governing specific
performance.
2.2 Corporate Organization and Other Related Matters. The Company is duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to carry on its
business as such business is now being conducted and to own the properties and
assets it now owns. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have
a material adverse effect on its business or properties. The Company has full
corporate power and authority to enter into this Agreement, to issue the Shares
and to consummate the transactions contemplated hereby
2.3 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for (i) qualifications or filings under the Securities
Act of 1933, as amended (the "Securities Act"), and the regulations thereunder
and (iii) qualification or filings required under all other applicable federal
and state securities laws and stock exchange or stock quotation service
regulations as may be required in connection with the transactions contemplated
by this Agreement.
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2.4 Valid Issuance of Shares. When issued, sold and delivered in accordance
with the terms hereof, the Shares will be duly and validly issued, fully-paid
and nonassessable.
3. Representations and Warranties of the Investor.
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The Investor hereby represents and warrants to the Company that:
3.1 Authorization. This Agreement constitutes the Investor's valid and
legally binding obligation, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency, and other similar laws affecting creditors'
rights, and rules of law governing specific performance, and the Investor has
full power and authority to enter into this Agreement.
3.2 Representations Not Made by Company. The Investor represents and
affirms that none of the following information has ever been represented,
guaranteed or warranted to the Investor, expressly or by implication, by any
person: (i) the approximate or exact length of time that the Investor will be
required to remain a security holder of the Company; (ii) the percentage of
profit and/or amount of or type of consideration, profit or loss to be realized,
if any, as a result of an investment in the Company; or (iii) the possibility
that the past performance or experience on the part of the Company or any
affiliate, or any officer, director, employee or agent of the foregoing, might
in any way indicate or predict the results of ownership of any Share or the
potential success of the Company's operations.
3.3 Purchase for Own Account. The Investor is the sole and true party in
interest, is acquiring the Securities for his/her/its own account for
investment, is not purchasing the Shares hereby for the benefit of any other
person, and has no present intention of holding or managing the Shares with
others or of selling, distributing or otherwise disposing of any portion of the
Securities. The Investor is a citizen of the United States, is at least 21 years
of age, and is a bona fide permanent resident of and is domiciled in the state
set forth below the Investor's name on the signature page hereof.
3.4 Disclosure and Review of Information. The Investor acknowledges and
represents that he has reviewed and has been given a reasonable opportunity to
review all documents, books and records of the Company pertaining to this
investment, and has been supplied with all additional information concerning the
Company and the Shares that has been requested by the Investor, has had a
reasonable opportunity to ask questions of and receive answers from the Company
or its representatives concerning this investment, and that all such questions
have been answered to the full satisfaction of the Investor. The Investor has
received, and acknowledges that he is receiving, no representations, written or
oral, from the Company or its officers, directors, employees, attorneys or
agents other than those contained in this Agreement. In making his decision to
purchase the Securities, the Investor has relied solely upon his review of this
Agreement, and independent investigations made by him or his representatives
without assistance of the Company. Without limiting the generality of the
foregoing, the Investor represents that he is the Chief Financial Officer of the
Company and, as a result, as access to all books and records of the Company and
is privy to all important information regarding the Company's business, status
and prospects.
3.5 Speculative Investment. The Investor understands that (i) he must bear
the economic risk of the investment in the Securities for an indefinite period
of time because the Shares have not been registered under the Securities Act or
qualified under the Securities Act or the securities laws of any other
jurisdiction and (ii) his investment in the Company represented by the Shares is
highly speculative in nature and is subject to a high degree of risk of loss in
whole or in part. The Investor has adequate means of providing for his current
needs and possible contingencies, and is able to bear the high degree of
economic risk of this investment, including, but not limited to, the possibility
of the complete loss of the Investor's entire investment and the limited
transferability of the Securities, which may make the liquidation of this
investment impossible for the indefinite future.
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3.6 Accredited Investor Status. The Investor is an "accredited investor"
within the meaning of Rule 501(a) promulgated under the Securities Act, in that
Investor is a director, executive officer, or general partner of the issuer of
the securities being offered or sold, or is a director, executive officer, or
general partner of a general partner of the issuer.
3.7 Investment Experience. The Investor has experience as an investor in
securities and acknowledges that he can bear the economic risk of his investment
in the Shares. By reason of the Investor's business or financial experience or
the business or financial experience of his professional advisors who are
unaffiliated with and who are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly, the Investor has the
capacity to protect his own interests in connection with his purchase of the
Shares. The Investor has the financial capacity to bear the risk of this
investment and has received from the Company all information he has requested
and considers necessary or appropriate for deciding whether to purchase the
Shares. The Investor has not been organized solely for the purpose of acquiring
the Shares.
3.8 Restricted Securities. The Investor understands that the Shares are and
will be "restricted securities" under the Securities Act inasmuch as they are
being acquired from the Company in a transaction not involving a public
offering, and that, under the Securities Act and applicable regulations
thereunder, such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In this connection, the
Investor represents that he is familiar with Rule 144 promulgated under the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act. The Investor further confirms and
agrees that the Company is under no obligation to register the re-sale of the
Shares under the Securities Act or any state securities laws.
3.9 Legends. The Investor understands that the certificates evidencing the
Shares will bear the legend set forth below, together with any other legends
required by the laws of the State of Utah and any other state with jurisdiction:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS
AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THESE
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STAEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IS
IN EFFECT WITH RESPECT TO SUCH SECURITIES OR THE COMPANY HAS RECEIVED
AN OPINION IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY PROVIDING
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933, AS AMENDED, IS AVAILABLE.
The legend set forth above shall be removed by the Company from any certificate
evidencing any of the Securities only (i) upon receipt by the Company of an
opinion in form and substance satisfactory to the Company that such legend may
be removed pursuant to Rule 144 promulgated under the Securities Act, or (ii)
upon confirmation that a registration statement under the Securities Act is at
that time in effect with respect to the legended Share and that such transfer
will not jeopardize the exemption or exemptions from registration pursuant to
which the respective Share was issued.
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3.10 Indemnification. The Investor acknowledges that he understands the
meaning and legal consequences of the representations and warranties set forth
in Section 3 hereof and that the Company and the officers, directors, employees
and agents of the Company have relied and will rely upon such representations
and warranties. The Investor hereby agrees to indemnify and hold harmless the
Company and each of its respective officers, directors, employees and agents
from and against any and all loss, claim, damage, liability, cost or expense
(including attorney's fees), joint or several, to which any such person may
become subject due to or arising out of: (i) any breach by the Investor of any
such representation or warranty; (ii) any inaccuracy in the representations and
warranties hereinabove set forth; (iii) the disposition of any of the Securities
by the Investor contrary to the foregoing representations and warranties; and
(iv) any action, suit, proceeding, demand, assessment or judgment incident to or
based upon any of the matters so indemnified against. Notwithstanding the
foregoing, however, no representation, warranty, acknowledgement or agreement
made herein by the Investor shall in any manner be deemed to constitute a waiver
of any rights granted to him under federal or state securities laws.
3.11 Conditions of Closing. The obligations of the parties are subject to
the fulfillment at or before Closing of each of the following conditions, any of
which may be waived in writing by the Company and the Investor:
3.12 Representations and Warranties. All representations and warranties of
the parties contained in this Agreement shall be true and correct in all
material respects at and as of the Closing with the same effect as though such
representations and warranties were made at and as of the Closing (other than
any representation or warranty that is expressly made as of a specified date,
which shall be true and correct in all material respects as of such specified
date only).
3.13 Performance. Each of the Company and the Investor shall have performed
and complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by him on or before
the Closing and shall have obtained all approvals, consents and qualifications
necessary to complete the purchase and sale described herein.
3.14 Securities Law Compliance. All authorizations, approvals and permits,
if any, of every governmental authority or regulatory body of the United States
or of any state that is required in connection with the lawful offering,
issuance and sale of the Securities pursuant to this Agreement shall have been
duly obtained and shall be effective on and as of the Closing.
4. Miscellaneous.
4.1 Entire Agreement. This Agreement constitutes the entire contract
between the Company and the Investor relative to the purchase and sale of the
Securities and supersedes any and all prior or contemporaneous oral or written
agreements, understandings and discussions with respect thereto.
4.2 Expenses. Each of the Company and the Investor will bear his own legal
and other fees and expenses in connection with the transactions contemplated in
this Agreement.
4.3 Governing Law; Consent to Jurisdiction and Venue. This Agreement shall
be governed by and construed in accordance with the laws of the State of Utah.
The Company and the Investor hereby irrevocably consent to the exclusive
jurisdiction and venue of State and federal courts within Salt Lake City, Utah
for any dispute arising out of this Agreement.
4.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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4.5 Headings. The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
4.6 Notices. Any notice required or permitted hereunder shall be given in
writing and shall be conclusively deemed effectively given upon personal
delivery, on the date of receipt if sent by telecopier or overnight courier,
charges prepaid, or five days after deposit in the United States mail, by
registered or certified mail, postage prepaid, addressed (a) if to the Company,
as set forth below the Company's name on the signature page of this Agreement,
and (b) if to the Investor, at the Investor's address as set forth below the
Investor's name on the signature page of this Agreement, or at such other
address as the Company or the Investor may designate by ten (10) days' advance
written notice to the Investor or the Company, respectively.
4.7 Survival of Representations and Warranties. The representations and
warranties of the parties contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and Closing; provided,
however, that such representations and warranties are only made as of the date
of such execution and delivery and as of such Closing.
4.8 Amendments. Any term or provision of this Agreement may be amended and
the observance of any term, condition, or provision of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by a written instrument signed by the Company and Investors
purchasing a majority of the Shares being purchased hereunder.
4.9 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision(s) shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were excluded and shall be enforceable in accordance with its terms.
4.10 Acknowledgement as to Counsel. The parties acknowledge and agree that
Xxxx Xxxxxxxx Xxxxx Xxx and Xxxxxxxx has prepared this Agreement and the other
documents contemplated hereby as counsel to the Company and not as counsel to
the Investor and that the Investor is entitled to retain his or its own counsel
at his or its own expense.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed or caused this Arkona
Inc. Stock Purchase Agreement to be executed by their duly authorized
representatives as of the date first written above.
"Company"
ARKONA, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, its CEO
Address:
00000 Xxxxx Xxxxx Xxxxx Xxxxxxx, #000
Xxxxx Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
"Investor"
/s/
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Xxxxxx X. Xxxxxxxx, an individual
Address:
____________________________________
____________________________________
Facsimile (___)_____________________
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