Preview
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
EXHIBIT 32
March 1, 2018 email from Cresco's counsel to
Fiorello's counsel, attaching due diligence request list
and draft definitive agreement
Index No. 652343/2018
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
From: Katherine B. Lewis [klewis@muchshelist.com]
Sent: 3/1/2018 12:17:43 PM
'slinsky@lucbro.com'
To: John Figone [johnf@crescolabs.com]; [slinsky@lucbro.com]
CC: Charlie Bachtell[charlesb@crescolabs.com]; Christopher R. Walker [CWalker@muchshelist.com]
Subject: RE: Participatingcounsel [IWOV-MS1.FID499011]
Attachments: Stock Purchase Agreement - (Fiorello Cresco Labs New York - Due Diligence Request
Pharmaceuticals, Inc.).DOCX;
List-FlorelloPharmaceuticals.DOCX
Scott,
Itis apleasure to meet you by email. Attached for your review is the initial
draft of the Stock Purchase Agreement and
the due diligence request. I suggest since my firm was not involved in the LOI stage, that we plan to discuss any initial
questions/comments and footnoted items in the draft prior to you turning back a revised version to us. In my
experience that is amore efficientroute and I understand that the parties desire to move forward as expeditiously as
possible. We also understand that many of the diligence requests may not be applicable, but would appreciate
confirmation of that inthe request itselfwhere noted.
Please letus know how you plan to handle distribution of due diligence materials. Christopher Walker at my firm will be
handling that part, so feel free to reach out to him directly on diligence items. Also, as an initial matter, would you tell
me whether Fiorello is an s-corp or a c-corp, and approximately how many shareholders ithas?
Thanks, and I lookforward to working with you.
Katherine
Katherine B. Lewis
Much Shelist, P.C.
191 North Wacker Drive, Suite 1800
Chicago, IL60606
Phone 312.521.2744
Fax 312.521.2844
klewis@muchshelist.com
Visitour website at www.muchshelist.com
Member of Ally Law
Please consider the environment before printing this email
.......................................................................................................................................................................................................................................................................................................
From: John Figone [mailto:johnf@crescolabs.com]
Sent: Thursday, March 01, 2018 10:48 AM
To: slinsky@lucbro.com
Cc: Katherine B. Lewis
Subject: Participating counsel
Scott,
Please be advised that Katherine Lewis of Much Shelist, P.C., will be assisting us with the drafting of
the definitive agreement. Kindly add her email address (she is copied on this email) to all email
correspondence. Thank you.
Regards,
John J. Figone
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003445
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
General Counsel
Cresco Labs, LLC
Managing Director
Cresco Labs California, LLC
350 Rhode Island Street, Suite 240
San Francisco, California 94102
(415176E3644
tel.:
mobile::{?811 635R932
email:johnf@gescolabs com
See our video:
ATTORNEY-CLIENT PRIVILEGED; DO NOT FORWARD WITHOUT PERMISSION This commimication constitutesan electronic ce-
---- on within the meaning of the
Electronic CommtricMions Privacy Act, 18U.S.C. 2510, and its disclosureis strictly limited to the recipient intended by the senderof this message.This communication may
contain confidential andprivileged material for the soleuse of the intended recipient, andreceipt by anyoneother thanthe intendedrecipient doesnot constitute a loss of the
cenEdendelor privileged natureof the communication. Any review or distdbation by othersis strictly prohibited. If you arenot the intended recipient, pleasecontactthe senderby
retum electronic mail and deleteall copiesof this communication.Thank you.
IRS CIRCULAR 230 NOTICE To ensurecompliancewith requirementsimposed by the U.S. Internal RevenueService,we inform you that any tax advicecontainedin this
commimicetion (including any attachments)is not intendedor written to be used,and cannotbe used,by any taxpayer for the purposesof (1) avoiding tax-relatedpenaltiesunder
the U.S. Intemal RevenueCodeor (2) promoting, marketing or recommendingto anotherparty any tax-related matters addressed
herein.
d Please consider the environment before printing this e-mail
_........._........................._...........-......................._..........._............._...........-......................._..........._........................._...........-..........._..........._........................._...........-......................._..........
The information
containedin this email
communication is intended
only for the personal
and confidential
use of the designated
recipient
named above.
This message may be an attorney-client
communication, and as suchis privileged
and confidential.
If the reader
of this message
is not the intended
you are
recipient, herebynotified
that you havereceived
this communicationin error,
and that any review,
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distribution, of the
message is strictly
prohibitêd.
If youhave received
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in error,
pleasenotifyus immediately
by telephoneand/orreply email.
_.....................................-...........,-....................._.....................................,-....................._...........--.......................-..................................._.........................-...........,-....................._...........--......
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003446
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
CONFIDENTIAL DRAFT DATED FEBRUARY 28, 2018 FOR DISCUSSION PURPOSES ONLY
SUBJECT TO DUE DILIGENCE REVIEW IN ALL RESPECTS
SUBJECT TO CRESCO REVIEW IN ALL RESPECTS
STOCK PURCHASE AGREEMENT
by and among
I ],
Sellers'
as Representative,
THE SELLERS PARTY HERETO,
FIORELLO PHARMACEUTICALS, INC.
and
CRESCO LABS NEW YORK, LLC
March ___, 2018
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003447
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
TABLE OF CONTENTS
Page
ARTICLE I PURCHASE AND SALE OF SHARES 2
1.01 Purchase and Sale of Shares 2
...............................................................................................
1.02 Calculation and Payment of 2
Consideration.........................................................................
1.03 Estimated Net Working 3
Capital..........................................................................................
1.04 Final Net Working Capital Calculation 3
..............................................................................
1.05 Post-Closing Adjustment 5
Payment.....................................................................................
1.06 Contingent Consideration. 5
..................................................................................................
1.07 No Security. 5
. .....................................................................................................................
1.08 Withholding 6
Rights.............................................................................................................
ARTICLE II THE CLOSING 6
2.01 The 6
Closing.........................................................................................................................
2.02 The Closing Transactions 6
...................................................................................................
ARTICLE III CONDITIONS TO CLOSING 6
3.01 Conditions to the Purchaser's 6
Obligations..........................................................................
Sellers'
3.02 Conditions to the Obligations 8
................................................................................
3.03 Mutual Conditions 9
..............................................................................................................
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY ... ... 9
4.01 Organization and Corporate 9
Power.....................................................................................
4.02 Subsidiaries; Right to Acquire Interests 9
.............................................................................
4.03 Authorization; No Breach; Valid and Binding Agreement.................................................
9
4.04 Capitalization, Title 10
..........................................................................................................
4.05 Financial 10
Statements.........................................................................................................
4.06 Absence of Certain 1I
Developments....................................................................................
4.07 Titleto Assets 12
...................................................................................................................
4.08 [Tax 13
Matters....................................................................................................................
4.09 Contracts and 13
Commitments.............................................................................................
4.10 Intellectual 14
Property..........................................................................................................
4.11 14
Litigation...........................................................................................................................
4.12 Governmental Authorities; 15
Consents................................................................................
4.13 Employee Benefit 15
Plans....................................................................................................
4.14 Compliance with Laws 15
.....................................................................................................
4.15 Undisclosed Liabilities 15
.....................................................................................................
4.16 Labor and Employment 16
....................................................................................................
4.17 16
Insurance...........................................................................................................................
4.18 Brokerage..........................................................................................................................
16
4.19 AffiliateTransactions 16
.......................................................................................................
4.20 Certain Payments 16
..............................................................................................................
4.21 Bank Accounts; Directors and Officers and Powers of Attorney 17
.....................................
4.22 Disclosure 17
.........................................................................................................................
AR.TICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS..........17
5.01 Authority, Validity and 17
Effect..........................................................................................
5.02 17
Title...................................................................................................................................
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003448
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
5.03 No Violation 18
.....................................................................................................................
5.04 Governmental Authorities; 18
Consents................................................................................
5.05 18
Litigation...........................................................................................................................
5.06 Brokerage..........................................................................................................................
18
5.07 18
Residency..........................................................................................................................
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . 18
........
6.01 Organization and Corporate 18
Power...................................................................................
6.02 Authorization; Valid and Binding 18
Agreement..................................................................
6.03 No Violation 19
.....................................................................................................................
6.04 Governmental Authorities; 19
Consents................................................................................
6.05 19
Litigation...........................................................................................................................
6.06 19
Brokerage..........................................................................................................................
ARTICLE VII COVENANTS 19
7.01 Conduct of the Business 19
...................................................................................................
7.02 Access to Books and Records 20
...........................................................................................
7.03 Regulatory Matters 20
...........................................................................................................
7.04 20
Conditions.........................................................................................................................
7.05 Notification 21
.......................................................................................................................
7.06 Exclusivity 21
........................................................................................................................
7.07 21
Cooperation.......................................................................................................................
7.08 Litigation Support 21
.............................................................................................................
7.09 Confidentiality 21
..................................................................................................................
Sellers'
7.10 22
Release.................................................................................................................
7.11 Financing. 22
.........................................................................................................................
ARTICLE VIII INDEMNIFICATION 23
8.01 Survival of Representations, Warranties, Covenants, Agreements and Other
23
Provisions..........................................................................................................................
8.02 Indemnification from the Sellers for the Benefit of the Purchaser 23
...................................
8.03 Indemnification by the Purchaser forthe Benefit of the Sellers 23
.......................................
8.04 Manner of 24
Payment...........................................................................................................
8.05 Defense of Third Party Claims 24
.........................................................................................
ARTICLE IX TERMINATION . 25
9.01 25
Termination.......................................................................................................................
9.02 Effect of 26
Termination........................................................................................................
ARTICLE X ADDITIONAL COVENANTS . ... ........ 26
................
10.01 [Tax 26
Matters....................................................................................................................
10.02 Further 28
Assurances.........................................................................................................
10.03 Disclosure Generally 28
.......................................................................................................
ARTICLE XI DEFINITIONS................. ___....... ................... 28
...................
11.01 Definitions 28
........................................................................................................................
11.02 Other Definitional Provisions - Successor Laws 32
..............................................................
ARTICLE XII MISCELLANEOUS 32
12.01 Press Releases 32
...................................................................................................................
12.02 Expenses 32
...........................................................................................................................
ii
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003449
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
12.03 Notices 33
..............................................................................................................................
12.04 34
Assignment.......................................................................................................................
12.05 34
Severability.......................................................................................................................
12.06 34
References.........................................................................................................................
12.07 Construction......................................................................................................................34
Sellers'
12.08 Representative 35
.....................................................................................................
12.09 AmendmentandWaiver 35
...................................................................................................
12.10 35
CompleteAgreement........................................................................................................
12.11 Third-Party Beneficiaries..................................................................................................
36
12.12 Waiverof Trial 36
byJury.....................................................................................................
12.13 Prevailing 36
Party.................................................................................................................
12.14 36
Deliveries..........................................................................................................................
12.15 Electronic Delivery 36
...........................................................................................................
12.16 37
Counterparts......................................................................................................................
12.17 Governing 37
Law/Arbitration..............................................................................................
12.18 Specific Performance 37
........................................................................................................
iii
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003450
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March
Sellers' "Sellers'
, 2018, is made by and among [ 1, as Representative (the
Representative"), each of the Sellers listed on the signatory page hereto (collectively, the "Sellers",
and each a "Seller"), Cresco Labs New York, LLC, a New York limited liability company
("Purchaser"), and Fiorello Pharmaceuticals, Inc., a New York corporation ("Fiorello"). Capitalized
terms used and not otherwise defined herein have the meanings set forth in Article XI below.
WHEREAS, in July 2014, Governor Andrew M. Cuomo and the New York State Legislature
enacted the Compassionate Care Act (the "Act") to provide a comprehensive, safe and effective
medical marijuana program. Under the Act, five original licenses were awarded to private marijuana
growers. The Act was expanded in August of 2017 and five additional licenses were awarded. One
of the additional licenses was awarded to the Company, which permits the Company to cultivate and
process medical cannabis in the State of New York, as well as to establish and operate four (4)
medical cannabis dispensaries (the "License").
WHEREAS, the Sellers owns all of the issued and outstanding shares of the Company's
capital stock collectively, the "Shares", and each a "Share"), each with a par value of $[ ]
per Share;
WHEREAS, prior to the date hereof, Cresco has deposited with the Escrow Agent pursuant
to the Escrow Agreement, a good faith down payment of Five Hundred Thousand Dollars ($500,000)
("Good Faith Payment") upon the execution and delivery of an executed Letter of Intent, in
anticipation of entering into this Agreement.
[WHEREAS, certain of the Sellers (each, a "Rollover Seller", and collectively the
"Rollover Sellers"), may elect to execute a Contribution and Exchange Agreemêilt (the
"Rollover Aweeiiiciit") with [CRESCO] and Purchaser. Upon the terms and conditions set
forth therein, Rollover Sellers will have agreed to, immediately prior to the Closing, contribute,
free and clear of any Liens, a number of Shares to [Cresco] (together, the "Rollover Shares"),
which shall have an equity value equal to the Equity Rollover Amount, in exchange for the
number of interests of Cresco ("Units") set forth opposite the Rollover Seller's name on
Schedule A to the Rollover Agreement. The equity contributier côñtemplated by the provióüs
sentence shall be referred to herein as the "Rollover". The Rollover is intended to qualify as a
tax-free contribution under Section 351 of the Code.]1
WHEREAS, the Purchaser desires to acquire, and each Seller desires to sell to the Purchaser,
all of the Shares on the terms and subject to the conditions set forth herein [(which, for the
avoidance of doubt, shall not include any Rollover Shares cóiitrilmted by any Rollover Sellers
to Cresco immediately prior to the Closing as part of the Rollover)].
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1 Note to draft:partiesto discuss whether the portionof thePurchase if can be structured as a tax-
equity Price, any,
freerollover.
CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003451
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01 Purchase and Sale of Shares
. Upon the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Sellers shall sell,assign, transfer and convey to the Purchaser, and the Purchaser shall
purchase and acquire from the Sellers, all of the outstanding Shares in exchange for the payment of
an aggregate amount equal to the Purchase Price.
1.02 Calculation and Payment of Consideration
(a) The purchase price (the "Purchase Price") payable as set forth below, shall be
Twenty-Two Million Five Hundred Thousand and 00/100 Dollars ($22,500,000.00), as adjusted
Sellers'
pursuant to Sections 1.03 and 1.04. At the Closing, the Purchaser shall deliver to the
Representative, on behalf of the Sellers:
(i) by wire transfer of immediately available funds to an account or
Sellers'
Preview
FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 EXHIBIT 32 March 1, 2018 email from Cresco's counsel to Fiorello's counsel, attaching due diligence request list and draft definitive agreement Index No. 652343/2018 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 From: Katherine B. Lewis [klewis@muchshelist.com] Sent: 3/1/2018 12:17:43 PM 'slinsky@lucbro.com' To: John Figone [johnf@crescolabs.com]; [slinsky@lucbro.com] CC: Charlie Bachtell[charlesb@crescolabs.com]; Christopher R. Walker [CWalker@muchshelist.com] Subject: RE: Participatingcounsel [IWOV-MS1.FID499011] Attachments: Stock Purchase Agreement - (Fiorello Cresco Labs New York - Due Diligence Request Pharmaceuticals, Inc.).DOCX; List-FlorelloPharmaceuticals.DOCX Scott, Itis apleasure to meet you by email. Attached for your review is the initial draft of the Stock Purchase Agreement and the due diligence request. I suggest since my firm was not involved in the LOI stage, that we plan to discuss any initial questions/comments and footnoted items in the draft prior to you turning back a revised version to us. In my experience that is amore efficientroute and I understand that the parties desire to move forward as expeditiously as possible. We also understand that many of the diligence requests may not be applicable, but would appreciate confirmation of that inthe request itselfwhere noted. Please letus know how you plan to handle distribution of due diligence materials. Christopher Walker at my firm will be handling that part, so feel free to reach out to him directly on diligence items. Also, as an initial matter, would you tell me whether Fiorello is an s-corp or a c-corp, and approximately how many shareholders ithas? Thanks, and I lookforward to working with you. Katherine Katherine B. Lewis Much Shelist, P.C. 191 North Wacker Drive, Suite 1800 Chicago, IL60606 Phone 312.521.2744 Fax 312.521.2844 klewis@muchshelist.com Visitour website at www.muchshelist.com Member of Ally Law Please consider the environment before printing this email ....................................................................................................................................................................................................................................................................................................... From: John Figone [mailto:johnf@crescolabs.com] Sent: Thursday, March 01, 2018 10:48 AM To: slinsky@lucbro.com Cc: Katherine B. Lewis Subject: Participating counsel Scott, Please be advised that Katherine Lewis of Much Shelist, P.C., will be assisting us with the drafting of the definitive agreement. Kindly add her email address (she is copied on this email) to all email correspondence. Thank you. Regards, John J. Figone CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003445 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 General Counsel Cresco Labs, LLC Managing Director Cresco Labs California, LLC 350 Rhode Island Street, Suite 240 San Francisco, California 94102 (415176E3644 tel.: mobile::{?811 635R932 email:johnf@gescolabs com See our video: ATTORNEY-CLIENT PRIVILEGED; DO NOT FORWARD WITHOUT PERMISSION This commimication constitutesan electronic ce- ---- on within the meaning of the Electronic CommtricMions Privacy Act, 18U.S.C. 2510, and its disclosureis strictly limited to the recipient intended by the senderof this message.This communication may contain confidential andprivileged material for the soleuse of the intended recipient, andreceipt by anyoneother thanthe intendedrecipient doesnot constitute a loss of the cenEdendelor privileged natureof the communication. Any review or distdbation by othersis strictly prohibited. If you arenot the intended recipient, pleasecontactthe senderby retum electronic mail and deleteall copiesof this communication.Thank you. IRS CIRCULAR 230 NOTICE To ensurecompliancewith requirementsimposed by the U.S. Internal RevenueService,we inform you that any tax advicecontainedin this commimicetion (including any attachments)is not intendedor written to be used,and cannotbe used,by any taxpayer for the purposesof (1) avoiding tax-relatedpenaltiesunder the U.S. Intemal RevenueCodeor (2) promoting, marketing or recommendingto anotherparty any tax-related matters addressed herein. d Please consider the environment before printing this e-mail _........._........................._...........-......................._..........._............._...........-......................._..........._........................._...........-..........._..........._........................._...........-......................._.......... The information containedin this email communication is intended only for the personal and confidential use of the designated recipient named above. This message may be an attorney-client communication, and as suchis privileged and confidential. If the reader of this message is not the intended you are recipient, herebynotified that you havereceived this communicationin error, and that any review, dissêminâticn, or copying distribution, of the message is strictly prohibitêd. If youhave received this transmission in error, pleasenotifyus immediately by telephoneand/orreply email. _.....................................-...........,-....................._.....................................,-....................._...........--.......................-..................................._.........................-...........,-....................._...........--...... CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003446 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 CONFIDENTIAL DRAFT DATED FEBRUARY 28, 2018 FOR DISCUSSION PURPOSES ONLY SUBJECT TO DUE DILIGENCE REVIEW IN ALL RESPECTS SUBJECT TO CRESCO REVIEW IN ALL RESPECTS STOCK PURCHASE AGREEMENT by and among I ], Sellers' as Representative, THE SELLERS PARTY HERETO, FIORELLO PHARMACEUTICALS, INC. and CRESCO LABS NEW YORK, LLC March ___, 2018 CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003447 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 TABLE OF CONTENTS Page ARTICLE I PURCHASE AND SALE OF SHARES 2 1.01 Purchase and Sale of Shares 2 ............................................................................................... 1.02 Calculation and Payment of 2 Consideration......................................................................... 1.03 Estimated Net Working 3 Capital.......................................................................................... 1.04 Final Net Working Capital Calculation 3 .............................................................................. 1.05 Post-Closing Adjustment 5 Payment..................................................................................... 1.06 Contingent Consideration. 5 .................................................................................................. 1.07 No Security. 5 . ..................................................................................................................... 1.08 Withholding 6 Rights............................................................................................................. ARTICLE II THE CLOSING 6 2.01 The 6 Closing......................................................................................................................... 2.02 The Closing Transactions 6 ................................................................................................... ARTICLE III CONDITIONS TO CLOSING 6 3.01 Conditions to the Purchaser's 6 Obligations.......................................................................... Sellers' 3.02 Conditions to the Obligations 8 ................................................................................ 3.03 Mutual Conditions 9 .............................................................................................................. ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY ... ... 9 4.01 Organization and Corporate 9 Power..................................................................................... 4.02 Subsidiaries; Right to Acquire Interests 9 ............................................................................. 4.03 Authorization; No Breach; Valid and Binding Agreement................................................. 9 4.04 Capitalization, Title 10 .......................................................................................................... 4.05 Financial 10 Statements......................................................................................................... 4.06 Absence of Certain 1I Developments.................................................................................... 4.07 Titleto Assets 12 ................................................................................................................... 4.08 [Tax 13 Matters.................................................................................................................... 4.09 Contracts and 13 Commitments............................................................................................. 4.10 Intellectual 14 Property.......................................................................................................... 4.11 14 Litigation........................................................................................................................... 4.12 Governmental Authorities; 15 Consents................................................................................ 4.13 Employee Benefit 15 Plans.................................................................................................... 4.14 Compliance with Laws 15 ..................................................................................................... 4.15 Undisclosed Liabilities 15 ..................................................................................................... 4.16 Labor and Employment 16 .................................................................................................... 4.17 16 Insurance........................................................................................................................... 4.18 Brokerage.......................................................................................................................... 16 4.19 AffiliateTransactions 16 ....................................................................................................... 4.20 Certain Payments 16 .............................................................................................................. 4.21 Bank Accounts; Directors and Officers and Powers of Attorney 17 ..................................... 4.22 Disclosure 17 ......................................................................................................................... AR.TICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS..........17 5.01 Authority, Validity and 17 Effect.......................................................................................... 5.02 17 Title................................................................................................................................... CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003448 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 5.03 No Violation 18 ..................................................................................................................... 5.04 Governmental Authorities; 18 Consents................................................................................ 5.05 18 Litigation........................................................................................................................... 5.06 Brokerage.......................................................................................................................... 18 5.07 18 Residency.......................................................................................................................... ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . 18 ........ 6.01 Organization and Corporate 18 Power................................................................................... 6.02 Authorization; Valid and Binding 18 Agreement.................................................................. 6.03 No Violation 19 ..................................................................................................................... 6.04 Governmental Authorities; 19 Consents................................................................................ 6.05 19 Litigation........................................................................................................................... 6.06 19 Brokerage.......................................................................................................................... ARTICLE VII COVENANTS 19 7.01 Conduct of the Business 19 ................................................................................................... 7.02 Access to Books and Records 20 ........................................................................................... 7.03 Regulatory Matters 20 ........................................................................................................... 7.04 20 Conditions......................................................................................................................... 7.05 Notification 21 ....................................................................................................................... 7.06 Exclusivity 21 ........................................................................................................................ 7.07 21 Cooperation....................................................................................................................... 7.08 Litigation Support 21 ............................................................................................................. 7.09 Confidentiality 21 .................................................................................................................. Sellers' 7.10 22 Release................................................................................................................. 7.11 Financing. 22 ......................................................................................................................... ARTICLE VIII INDEMNIFICATION 23 8.01 Survival of Representations, Warranties, Covenants, Agreements and Other 23 Provisions.......................................................................................................................... 8.02 Indemnification from the Sellers for the Benefit of the Purchaser 23 ................................... 8.03 Indemnification by the Purchaser forthe Benefit of the Sellers 23 ....................................... 8.04 Manner of 24 Payment........................................................................................................... 8.05 Defense of Third Party Claims 24 ......................................................................................... ARTICLE IX TERMINATION . 25 9.01 25 Termination....................................................................................................................... 9.02 Effect of 26 Termination........................................................................................................ ARTICLE X ADDITIONAL COVENANTS . ... ........ 26 ................ 10.01 [Tax 26 Matters.................................................................................................................... 10.02 Further 28 Assurances......................................................................................................... 10.03 Disclosure Generally 28 ....................................................................................................... ARTICLE XI DEFINITIONS................. ___....... ................... 28 ................... 11.01 Definitions 28 ........................................................................................................................ 11.02 Other Definitional Provisions - Successor Laws 32 .............................................................. ARTICLE XII MISCELLANEOUS 32 12.01 Press Releases 32 ................................................................................................................... 12.02 Expenses 32 ........................................................................................................................... ii CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003449 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 12.03 Notices 33 .............................................................................................................................. 12.04 34 Assignment....................................................................................................................... 12.05 34 Severability....................................................................................................................... 12.06 34 References......................................................................................................................... 12.07 Construction......................................................................................................................34 Sellers' 12.08 Representative 35 ..................................................................................................... 12.09 AmendmentandWaiver 35 ................................................................................................... 12.10 35 CompleteAgreement........................................................................................................ 12.11 Third-Party Beneficiaries.................................................................................................. 36 12.12 Waiverof Trial 36 byJury..................................................................................................... 12.13 Prevailing 36 Party................................................................................................................. 12.14 36 Deliveries.......................................................................................................................... 12.15 Electronic Delivery 36 ........................................................................................................... 12.16 37 Counterparts...................................................................................................................... 12.17 Governing 37 Law/Arbitration.............................................................................................. 12.18 Specific Performance 37 ........................................................................................................ iii CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003450 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March Sellers' "Sellers' , 2018, is made by and among [ 1, as Representative (the Representative"), each of the Sellers listed on the signatory page hereto (collectively, the "Sellers", and each a "Seller"), Cresco Labs New York, LLC, a New York limited liability company ("Purchaser"), and Fiorello Pharmaceuticals, Inc., a New York corporation ("Fiorello"). Capitalized terms used and not otherwise defined herein have the meanings set forth in Article XI below. WHEREAS, in July 2014, Governor Andrew M. Cuomo and the New York State Legislature enacted the Compassionate Care Act (the "Act") to provide a comprehensive, safe and effective medical marijuana program. Under the Act, five original licenses were awarded to private marijuana growers. The Act was expanded in August of 2017 and five additional licenses were awarded. One of the additional licenses was awarded to the Company, which permits the Company to cultivate and process medical cannabis in the State of New York, as well as to establish and operate four (4) medical cannabis dispensaries (the "License"). WHEREAS, the Sellers owns all of the issued and outstanding shares of the Company's capital stock collectively, the "Shares", and each a "Share"), each with a par value of $[ ] per Share; WHEREAS, prior to the date hereof, Cresco has deposited with the Escrow Agent pursuant to the Escrow Agreement, a good faith down payment of Five Hundred Thousand Dollars ($500,000) ("Good Faith Payment") upon the execution and delivery of an executed Letter of Intent, in anticipation of entering into this Agreement. [WHEREAS, certain of the Sellers (each, a "Rollover Seller", and collectively the "Rollover Sellers"), may elect to execute a Contribution and Exchange Agreemêilt (the "Rollover Aweeiiiciit") with [CRESCO] and Purchaser. Upon the terms and conditions set forth therein, Rollover Sellers will have agreed to, immediately prior to the Closing, contribute, free and clear of any Liens, a number of Shares to [Cresco] (together, the "Rollover Shares"), which shall have an equity value equal to the Equity Rollover Amount, in exchange for the number of interests of Cresco ("Units") set forth opposite the Rollover Seller's name on Schedule A to the Rollover Agreement. The equity contributier côñtemplated by the provióüs sentence shall be referred to herein as the "Rollover". The Rollover is intended to qualify as a tax-free contribution under Section 351 of the Code.]1 WHEREAS, the Purchaser desires to acquire, and each Seller desires to sell to the Purchaser, all of the Shares on the terms and subject to the conditions set forth herein [(which, for the avoidance of doubt, shall not include any Rollover Shares cóiitrilmted by any Rollover Sellers to Cresco immediately prior to the Closing as part of the Rollover)]. NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1 Note to draft:partiesto discuss whether the portionof thePurchase if can be structured as a tax- equity Price, any, freerollover. CONFIDENTIAL - SUBJECT TO CONFIDENTIALITY STIPULATION AND ORDER CRES00003451 FILED: NEW YORK COUNTY CLERK 01/06/2022 10:46 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 376 RECEIVED NYSCEF: 01/06/2022 ARTICLE I PURCHASE AND SALE OF SHARES 1.01 Purchase and Sale of Shares . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Sellers shall sell,assign, transfer and convey to the Purchaser, and the Purchaser shall purchase and acquire from the Sellers, all of the outstanding Shares in exchange for the payment of an aggregate amount equal to the Purchase Price. 1.02 Calculation and Payment of Consideration (a) The purchase price (the "Purchase Price") payable as set forth below, shall be Twenty-Two Million Five Hundred Thousand and 00/100 Dollars ($22,500,000.00), as adjusted Sellers' pursuant to Sections 1.03 and 1.04. At the Closing, the Purchaser shall deliver to the Representative, on behalf of the Sellers: (i) by wire transfer of immediately available funds to an account or Sellers'