STOCK PURCHASE AGREEMENT
Exhibit 10.1
This STOCK PURCHASE AGREEMENT (the “Agreement”) is made on August 7, 2021, among PINEAPPLE VENTURES, INC., a California Corporation (the “Shareholder”), whose address is 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000; CAPITAL GROWTH INVESTMENTS, INC., a California corporation (the “Company”) whose address is 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000; and PINEAPPLE, INC., A Nevada Corporation (the “Buyer”).
The Shareholder is the owner of all the issued and outstanding capital stock (the “Shares”) of the Company, as set forth on Exhibit A attached hereto. The Shareholder desires to sell to Buyer and Buyer desire to purchase from the Shareholder Fifty Thousand (50,000) of the outstanding Shares (the “Sale Shares”) for the Purchase Price (defined in Section 1.2 below), upon the terms and subject to the conditions hereinafter set forth, which constitutes fifty percent (50%) of the issued and outstanding common stock of the Company.
In consideration of the promises and of the respective covenants and agreements contained herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES; CLOSING
| a. | Payment. The Purchase Price shall be paid by Buyer in installments of $100,000 within 5 days of execution in exchange for 5% of the shares of the Company, representing 5000 common shares of stock. Within 60 days of execution the remaining balance of $900,000 shall be paid in exchange for 45% of the shares of the Company, representing 45,000 shares of stock. |
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
The Shareholder and Individual Guarantor represent and warrant to the Buyer that the representations and warranties contained in Sections 2.1 through 2.9, below, are true and correct on the date hereof in all material respects.
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| Stock Purchase Agreement |
| 2.9 | Additional Representations. |
(a) The Company’s corporate existence is in good standing; and
(b) All proceedings required by law or provisions of this Agreement to be taken by the Shareholder and the Company in connection with the transactions provided for in this Agreement have been duly and validly taken.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to the Shareholder that the following representations and warranties are true and correct on the date hereof in all material respects.
Release of information. The Shareholder and the Company shall provide to Buyer and to Buyer’s agents full access, during normal business hours, throughout the period before the closing, to all of the Company’s properties, books, contracts, commitments, and records and shall furnish to Buyer during that period all the information concerning the Company’s affairs that the Buyer may reasonably request.
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ARTICLE V
This Agreement and all of the obligations of the Buyer under this Agreement are, at the Buyer’s option, subject to the fulfillment, before or at the times set forth herein, of each of the conditions set forth below. If the Buyer is not satisfied with any of the conditions contained herein, the Buyer shall give the Shareholder written notice of such dissatisfaction at, or before the Closing Date, and be entitled to terminate this Agreement.
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| 7.3 | Third Party Claims. |
(a) If any third party shall notify any party to this Agreement (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other party to this Agreement (the “Indemnifying Party) under this Article VII, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to assume and thereafter conduct the defense of the Third Party Claim with counsel of his choice reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably) unless the judgment or proposed settlement involves only the payment of money damages by the Indemnifying Party and does not impose an injunction or other equitable relief upon the Indemnified Party.
(c) Unless and until an Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 7.3(b) above, however, the Indemnified Party may defend against the Third Party Claim in any manner he or it reasonably may deem appropriate. In no event shall the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld).
ARTICLE VIII
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| Stock Purchase Agreement |
8.4 Governing Law. This Agreement shall be governed by, construed, interpreted and the rights of the parties determined in accordance with the laws of the State of California (regardless of the laws that might be applicable under principles of conflicts of law).
| (i) | If to Shareholder: | PINEAPPLE VENTURES, Inc. 00000 Xxxxx Xxxxxx Xxxx., #000 | |
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | |||
| Attn: | |||
| E-mail: | |||
| with a copy to: | |||
| Attn: | |||
| E-mail: | |||
(ii) |
If to Company: |
CAPITAL GROWTH INVESTMENTS, INC. 00000 Xxxxx Xxxxxx Xxxx., #000 | |
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attn: | |||
|
E-mail: | ||
| with a copy to: | |||
Attn: E-mail: | |||
If to Buyer: |
|||
E-mail: Xxxx@xxxxxxxxxxxx.xxx |
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| Stock Purchase Agreement |
[Signatures on following page]
| Page 7 |
| Stock Purchase Agreement |
| SHAREHOLDER: | ||
| PINEAPPLE VENTURES, INC., a California corporation | ||
| By: | ||
| Its: | ||
| COMPANY: | ||
| CAPITAL GROWTH INVESTMENTS, INC., a | ||
| California corporation | ||
| By: | ||
| Its: | ||
| BUYER: | ||
| PINEAPPLE, INC. A Nevada Corporation | ||
| By: | Xxxxx Xxxxxx | |
| Its: | CEO | |
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| Stock Purchase Agreement |
EXHIBIT A
(SHARES)
| Shareholder | No. of Shares | Cert. No. | ||
PINEAPPLE VENTURES, Inc. |
100,000 |
100 |
Exhibit A to Stock Purchase Agreement
(Shares)
EXHIBIT B
(SHAREHOLDER AGREEMENT)
Exhibit B-1 to Stock Purchase Agreement
(Shareholder Agreement)
| Exhibit B-1 to Stock Purchase Agreement |
| (Shareholder Agreement) |
SHAREHOLDER AGREEMENT FOR CAPITAL GROWTH INVESTMENTS, INC.
This Shareholder Agreement (“Agreement”) is made and entered into as of
August 7, 2021, by and between Pineapple, Inc., A Nevada Corporation (“BUYER”), PINEAPPLE VENTURES, Inc., a California corporation (“PINEAPPLE VENTURES”), whose address is 00000 Xxxxx Xxxxxx Xxxx #000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, CAPITAL GROWTH INVESTMENTS, INC., a California corporation whose address is 00000 Xxxxx Xxxxxx #000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the “Corporation”).
A. The Corporation has secured retail delivery, cultivation, manufacturing, and distribution licenses in Riverside County (Palm Springs) and Statewide (the “Project”).
B. The Corporation has issued or intends to issue shares of the Corporation’s common stock to raise funds for the Project and BUYER intends to enter into an agreement to purchase a portion of the shares of the Corporation (together with any shares subsequently acquired by BUYER, the “BUYER Shares”) from PINEAPPLE VENTURES as an investment and for his own account, in accordance with a stock purchase agreement to be entered into between the PINEAPPLE VENTURES and BUYER (the “Stock Purchase Agreement”).
C. In order to induce BUYER to enter into the Stock Purchase Agreement and the Related Agreements (as defined herein) and become a shareholder in the Corporation, the Corporation, and PINEAPPLE VENTURES, have agreed to enter into this Agreement.
The parties agree:
1. Acquisition of the BUYER Shares. Upon payment for the BUYER Shares in accordance with the Stock Purchase Agreement, the BUYER Shares will be duly-issued, fully-paid and non-assessable shares of the Corporation’s common stock, and will further be governed by and subject to the provisions of this Agreement.
2. Anti-Dilution. The Corporation shall not issue any additional shares, whether voting or nonvoting, or of any class other than common stock, if after giving effect to such issue, BUYER’s percentage interest of all outstanding shares of stock of the Corporation would be less than two and fifty percent (50%), and the Corporation shall not record on its books and records any transfer of shares except those made in accordance with this Agreement.
3. Dividends; Monthly Distributions of Net Cash From Operations. The Corporation shall make monthly dividend distributions of fifty percent (50%) of the Net Cash From Operations to BUYER. “Net Cash From Operations” means the gross cash proceeds derived from Corporation operations during the preceding calendar month (including sales and dispositions in the ordinary course of business) less the portion thereof used to pay all Corporation operating expenses, (as projected in exhibit A) taxes, debt payments, capital improvements, replacements, and reasonable reserves and contingencies for that month, all as reasonably determined by the Board. “Net Cash From Operations” shall not be reduced by depreciation, amortization, cost recovery deductions, or similar allowance, but shall be increased by any reductions of reserves previously established.
| Exhibit B-2 to Stock Purchase Agreement |
| (Shareholder Agreement) |
4. Right to Indemnification. In the event that BUYER is a party to or is threatened to be made a party to or is involved in any investigation, action, suit, or proceeding, whether civil, criminal, administrative, or investigative, formal or informal, by reason of the fact that he is or was a shareholder, director or officer of the Corporation, whether the basis of the proceeding is alleged action in his capacity as a shareholder, director, officer, employee, or agent or in any other capacity, BUYER shall be indemnified, defended, and held harmless by the Corporation against all expenses, liability, and loss (including attorney fees, judgments, fines, excise taxes, or penalties and amounts to be paid in settlement) actually incurred by him in connection therewith. Amounts to which BUYER is entitled under this Section shall be paid within thirty (30) days of BUYER’s demand therefore and presentation of appropriate documentation of the expense.
5. Super-Majority Requirements. In no event may action be taken by the Shareholders or the Board of Directors of the Corporation regarding a Fundamental Issue without the approval, by vote or written consent, of Shareholders holding not less than eighty percent (80%) of the issued and outstanding voting shares. “Fundamental Issue” means any of the following matters: (i) amendment of the Articles of Incorporation or Bylaws of the Corporation; (ii) issuance of additional shares or other increase of the Shareholders’ equity in the Corporation; (iii) merger or consolidation of the Corporation with another entity; (iv) transactions by the Corporation with any Shareholder or any related party other than in the ordinary course of business; (v) redemption of stock; (vi) dissolution; (vii) transactions where the Corporation would borrow or expend funds of more than Five Hundred Thousand and 00/100 Dollars ($500,000.00); and (viii) sale of all or substantially all of the Corporation’s assets outside of the ordinary course of business.
6. Related Agreements. This Agreement is being executed as part of a transaction between BUYER and the Corporation which includes the following related agreements: the Stock Purchase Agreement and any other written agreements executed in connection therewith (the “Related Agreements”).
7. Legend on Certificates. The Shareholders agree the following or similar legend will be placed on all share certificates issued to them: The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 or under the securities law of any state. The shares are restricted as that term is used in Rule 144 of the Securities and Exchange Commission. Transfers of the shares cannot be made unless in compliance with applicable state and federal law and until many conditions have been fulfilled, including holding the shares for two years after they have been fully paid. Please consult Rule 144 for complete information. The shares represented by this certificate are subject to a shareholder agreement dated August 13, 21, as amended, between some or all of the promoters and/or shareholders of this corporation, which agreement places restrictions on these shares. The Agreement is on file with the secretary of the Corporation and may be examined. The restrictions are not invalidated by a failure to place the legends on the shares.
| Exhibit B-3 to Stock Purchase Agreement |
| (Shareholder Agreement) |
8. Termination. This Agreement will terminate on the occurrence of any of the following events:
a. The occurrence of any event that reduces the number of Shareholders of the Corporation who are parties to this Agreement to one.
b. The voluntary agreement of all parties to this Agreement.
9. Ratification of Agreement. The Shareholders will vote their stock in the Corporation as provided in this Agreement so as to cause the Corporation to adopt and ratify all the terms of this Agreement.
10. Notices. All notices, offers, acceptances, requests, and other communications dealing with this Agreement will be in writing and will be deemed to have been given if delivered or mailed by certified or registered mail to the Shareholders at the addresses of record with the Corporation.
11. Additional Shareholders. Additional persons may become Shareholders under procedures established by the present Shareholders.
12. Mergers, Substitute and Resulting Securities. This Agreement will apply to securities received in exchanges, whether by merger or otherwise, and to securities resulting from ownership or securities contemplated by this Agreement or traceable to it.
13. Miscellaneous. The terms of this Agreement will be binding on, enforceable by, and inure to the benefit of the heirs and successors of the parties. This Agreement will be governed by and construed in accordance with the laws of the State of California. Because of the difficulty of assessing damages and the acknowledgment of the parties that each is relying on the others to perform under this Agreement, and that there would not be an adequate remedy at law for a breach of this Agreement, any breach may be enjoined by injunctive relief. A breach by one party does not justify rescission by the others unless all others agree. A failure to insist on performance does not waive the right to insist on performance in the future, or even as to part breaches, unless the breaching party has been prejudiced by an unreasonable delay in asserting the right. One executed copy of this Agreement will be on file with the Corporation’s secretary.
14. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. This Agreement shall become effective when one or more counterparts have been executed by each of the parties and delivered to the other parties. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts-of-law principles that would require the application of any other law.
16. Entire Agreement. This Agreement (including all Exhibits and other attachments hereto), contains the entire agreement of the parties with respect to the matters set forth in this Agreement, and no representations made by either party may be relied on unless set forth in this Agreement, or in the exhibits and schedules to this Agreement. This Agreement supersedes all prior agreements, understandings, promises, and arrangements, oral or written, between the parties with respect to the matters set forth herein, may be altered or amended only by an instrument in writing, duly executed by all of the parties.
17. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Any purported assignment of rights or delegation of obligations in violation of this Section, whether voluntary or involuntary, by merger, consolidation, dissolution, operation of law, or otherwise, is void.
18. Third Parties. Nothing in this Agreement, express or implied, is intended to or shall be construed to confer upon or give any person other than the parties and their respective successors and permitted assigns, any legal or equitable right, remedy or claim under or with respect to this Agreement.
19. Waiver. Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.
20. Severability. In the event that a court or arbitral body of competent jurisdiction holds any provision of this Agreement invalid, illegal or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Agreement, which other provisions shall remain in full force and effect, and the application of such invalid, illegal or unenforceable provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable shall be valid and be enforced to the fullest extent permitted by law. To the extent permitted by applicable law, each party waives any provision of law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect.
***
[Signatures on following page]
| Exhibit B-4 to Stock Purchase Agreement |
| (Shareholder Agreement) |
The parties have executed this Shareholder Agreement as of the day and year first above written.
| SHAREHOLDERS: | ||
| By: | Xxxxx Xxxxxx | |
| CEO | ||
| PINEAPPLE VENTURES: | ||
| PINEAPPLE VENTURES, INC., a California Corporation | ||
| By: | ||
| Its: | ||
| Corporation: | ||
| CAPITAL GROWTH INVESTMENTS, | ||
| INC., a California Corporation | ||
| By: | ||
| Its: | ||
| Exhibit B-5 to Stock Purchase Agreement |
| (Shareholder Agreement) |