Preview
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
EXHIBIT 42
June 29, 2018 Merger Agreement between GTI and
Fiorello
Index No. 652343/2018
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
by and among
GTI CORE, LLC,
FIORELLO MERGER SUB, INC.,
FIORELLO PHARMACEUTICALS, INC.,
SIROSS LLC, AS REPRESENTATIVE,
and
THE SECURITYHOLDERS SET FORTH ON SCHEDULE 1 HERETO
Dated as of June 29, 2018
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031578
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
TABLE OF CONTENTS
ARTICLE I THE MERGER........................................................................................................................2
Section 1.01 The Merger. ..........................................................................................................2
Section 1.02 Articles of Incorporation and Bylaws...................................................................2
Section 1.03 Directors and Officers of Surviving Entity. ..........................................................2
Section 1.04 Effective Time; Closing........................................................................................2
ARTICLE II EFFECT ON CAPITAL STOCK; MERGER CONSIDERATION; PAYMENT
PROCEDURES ..............................................................................................................................3
Section 2.01 Effect on Capital Stock.........................................................................................3
Section 2.02 Effect on Warrant..................................................................................................3
Section 2.03 Rights as Shareholders; Stock Transfers...............................................................4
Section 2.04 Surrender and 4
Payment.........................................................................................
Section 2.05 Dissenting Shares..................................................................................................6
Section 2.06 Closing Amounts..................................................................................................6
Section 2.07 Post-Closing Adjustments.....................................................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY..........................................8
Section 3.01 Organization and Corporate Power.......................................................................8
Section 3.02 Subsidiaries; Right to Acquire Interests...............................................................8
Section 3.03 Authorization; No Breach; Valid and Binding Agreement...................................8
Section 3.04 Capitalization, Title..............................................................................................9
Section 3.05 Financial Statements.............................................................................................9
Section 3.06 Absence of Certain Developments......................................................................10
Section 3.07 Title to Assets. ....................................................................................................12
Section 3.08 Tax Matters.........................................................................................................12
Section 3.09 Contracts and Commitments...............................................................................13
Section 3.10 Intellectual 14
Property............................................................................................
Section 3.11 Litigation.............................................................................................................14
Section 3.12 Governmental Authorities; Consents..................................................................15
Section 3.13 Employee Benefit Plans......................................................................................15
Section 3.14 Compliance with Laws.......................................................................................15
Section 3.15 Undisclosed Liabilities.......................................................................................15
Section 3.16 Labor and Employment. 16
.....................................................................................
Section 3.17 Insurance.............................................................................................................16
Section 3.18 Brokerage............................................................................................................16
Section 3.19 Affiliate Transactions.........................................................................................16
Section 3.20 Certain 17
Payments................................................................................................
Section 3.21 Bank Accounts; Directors and Officers and Powers of Attorney. 17
......................
Section 3.22 Agreements with Regulatory Agencies..............................................................17
Section 3.23 No Other Representations...................................................................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB........18
Section 4.01 Making of Representations and Warranties........................................................18
Section 4.02 Organization, Standing and 18
Authority................................................................
Section 4.03 Corporate Power. ................................................................................................18
i
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031579
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
Section 4.04 Corporate Authority............................................................................................18
Section 4.05 Sufficiency of 19
Funds...........................................................................................
Section 4.06 Litigation.............................................................................................................19
Section 4.07 Licensure.............................................................................................................19
Section 4.08 Purpose. ..............................................................................................................19
Section 4.09 Solvency. ............................................................................................................19
Section 4.10 19
Brokers................................................................................................................
ARTICLE V COVENANTS......................................................................................................................20
Section 5.01 Covenants of Company.......................................................................................20
Section 5.02 Commercially Reasonable Efforts......................................................................23
Section 5.03 Shareholder Approval.........................................................................................23
Section 5.04 Regulatory Filings; Consents..............................................................................23
Section 5.05 Publicity..............................................................................................................24
Section 5.06 Access; Information............................................................................................24
Section 5.07 No Solicitationby Company...............................................................................25
Section 5.08 Notification of Certain Changes.........................................................................25
Section 5.09 Current Information............................................................................................26
Section 5.10 Certain Litigation................................................................................................26
Section 5.11 Director and Officer Resignations......................................................................26
Section 5.12 Coordination. ......................................................................................................26
Section 5.13 Confidentiality....................................................................................................27
Section 5.14 Employee Benefits..............................................................................................27
Section 5.15 Regulatory Matters. ............................................................................................28
Section 5.16 Submission of Affidavits....................................................................................28
Section 5.17 Certain Tax Matters............................................................................................28
Section 5.18 Release................................................................................................................30
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER...........................................32
Section 6.01 Conditions to Obligations of the Parties to Effect the Merger............................32
Section 6.02 Conditions to Obligations of Company. .............................................................32
Section 6.03 Conditions to Obligations of Parent....................................................................33
Section 6.04 Frustration of Closing Conditions.......................................................................33
ARTICLE VII TERMINATION...............................................................................................................33
Section 7.01 Termination.........................................................................................................33
Section 7.02 Delay...................................................................................................................35
Section 7.03 Effect of Termination..........................................................................................35
ARTICLE VIII INDEMNIFICATION......................................................................................................35
Section 8.01 Survival of Representations and Warranties.......................................................35
Section 8.02 Indemnification Provisions for Parent's Benefit.................................................35
Securityholders'
Section 8.03 Indemnification Provisions for Benefit. ..................................36
Section 8.04 Limitations on Indemnification. .........................................................................36
Section 8.05 Indemnification and Set-off for Cresco Losses. .................................................37
ARTICLE IX MISCELLANEOUS...........................................................................................................41
ii
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031580
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
Section 9.01 Waiver; Amendment...........................................................................................41
Section 9.02 Governing Law; Waiver of Right to Trial by 4 1
Jury..............................................
Section 9.03 Expenses.............................................................................................................42
Section 9.04 Notices................................................................................................................42
Section 9.05 Severability.........................................................................................................42
Section 9.06 Enforcement ofthe Agreement...........................................................................43
Section 9.07 Assignment.........................................................................................................43
Section 9.08 Certain Agreements and Acknowledgements.....................................................43
Section 9.09 Director and Officer Insurance. 43
..........................................................................
Section 9.10 Investigation; Limitation on Warranties.............................................................44
Section 9.11 Counterparts........................................................................................................45
Section 9.12 No Strict Construction........................................................................................45
Section 9.13 Captions..............................................................................................................45
Section 9.14 Entire Agreement................................................................................................45
Section 9.15 Parties in Interest; Third Party Beneficiaries......................................................45
Section 9.16 Interpretation.......................................................................................................46
Section 9.17 Waiver of Conflicts.............................................................................................46
Section 9.18 Representative.....................................................................................................47
iii
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031581
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
Schedules
Schedule 1 - Securityholders
The Disclosure Schedule
Exhibits
Exhibit A - Certificate of Merger
Exhibit B - Affiliate Guaranty
Exhibit Z - Definitions
iv
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031582
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of June 29, 2018,
by and among GTI Core, LLC, a Delaware limited liability company ("Parent"), Fiorello Merger Sub,
Inc., a New York corporation and a wholly owned subsidiary of Parent ("Merger Sub"), Fiorello
Pharmaceuticals, Inc., a New York corporation ("Company"), Siross LLC, a Delaware limited liability
company, solely in its capacity as the representative for Company's Securityholders (together with any
successor appointed pursuant to Section 9.18, "Representative"), and the Securityholders set forth on
Schedule 1 that have, concurrently with the execution and delivery of this Agreement by Parent, Merger
Sub, Company and Representative, agreed to be bound by the terms of this Agreement by executing and
delivering a joinder agreement to this Agreement. Parent, Merger Sub, Company and, solely in its
capacity as and solely to the extent applicable, Representative, shall be referred to herein from time to
"Party"
time as a and collectively as the "Parties". Capitalized terms used and not otherwise defined
herein have the meanings set forth in Exhibit Z attached hereto.
RECITALS
WHEREAS, in July 2014, Governor Andrew M. Cuomo and the New York State
Legislature enacted the Compassionate Care Act to provide a comprehensive, safe and effective medical
marijuana program. Under the Compassionate Care Act, five original licenses were awarded to private
marijuana growers. The Compassionate Care Act was expanded in August of 2017 and five additional
licenses were awarded. One of the additional licenses was awarded to Company, which permits
Company to cultivate and process medical cannabis in the State of New York, as well as to establish and
operate four medical cannabis dispensaries (the "Business");
WHEREAS, Parent desires to acquire one hundred percent (100%) of the issued and
outstanding shares of capital stock of Company in a reverse-subsidiary merger transaction on the terms
and subject to the conditions set forth herein;
WHEREAS, the respective boards of directors of Company and Merger Sub have each (i)
determined that the Merger is fair, advisable and in the best interests of their respective companies and
shareholders and (ii) approved this Agreement and the transactions contemplated hereby, including the
Merger, upon the terms and subject to the conditions set forth herein;
WHEREAS, the respective boards of directors of each of Company and Merger Sub has
determined to recommend to its shareholders the approval and adoption of this Agreement and the
transactions contemplated hereby, including the Merger; and
WHEREAS, the board of directors of Parent has approved this Agreement and the
Merger and the other transactions contemplated hereby.
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, and
intending to be legally bound, the Parties agree as follows:
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031583
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
ARTICLE I
THE MERGER
Section 1.01 The Merger.
At the Effective Time, on the terms and subject to the conditions of this Agreement and in
accordance with all applicable Laws, Merger Sub shall merge with and into Company (the "Merger"),
whereupon the separate corporate existence of Merger Sub shall cease and Company shall survive and
continue to exist as a wholly owned Subsidiary of Parent (Company, as the surviving entity in the Merger,
sometimes being referred to herein as the "Surviving Entity").
Section 1.02 Articles of Incomoration and Bvlaws.
The articles of incorporation and bylaws of Company, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation and bylaws of the Surviving Entity until, subject to
Section 9.09(a), thereafter amended as provided by applicable Law.
Section 1.03 Directors and Officers of Survivine Entity.
The directors and officers of Merger Sub, in each case, immediately prior to the Effective Time
shall, from and after the Effective Time, be the directors and officers, respectively, of the Surviving Entity
until their successors have been duly elected or appointed and qualified or until their earlier death,
resignation, or removal in accordance with the articles of incorporation and by-laws of the Surviving
Entity; provided, however, that immediately after the Effective Time, Susan Yoss and Eric Sirota shall be
elected to the board of directors of the Surviving Entity and shall remain directors on the board of
directors of the Surviving Entity until such time as the Deferred Consideration has been paid in full in
accordance with Section 2.01(b). Parent shall take, and shall cause its Affiliates to take, all actions
necessary and desirable to cause Susan Yoss and Eric Sirota to be elected and remain directors on the
board of directors of the Surviving Entity in accordance with the proviso in the immediately preceding
sentence, including by voting its shares in favor of the foregoing and not taking any action that would be
inconsistent with the foregoing.
Section 1.04 Effective Time: Closing.
(a) On the terms and subject to the conditions of this Agreement, at the Closing, the
Parties shall cause a certificate of merger substantially in the form of Exhibit A attached hereto (the
"Certificate of Merger") to be executed, acknowledged and filed with the Department of State of the
State of New York and make all such other filings or recordings as may be required by the NYBCL to
consummate the Merger. The Merger shall become effective (the "Effective Time") immediately upon
the filing of the Certificate of Merger with the Department of State of the State of New York.
(b) At the Effective Time, Merger Sub shall be merged with and into Company, the
separate existence of Merger Sub shall cease and the Surviving Entity, without further action, shall
succeed to all the assets, rights, privileges, powers and franchises and be subject to all of the liabilities,
restrictions, disabilities and duties of Company and Merger Sub.
(c) On the terms and subject to the conditions of this Agreement, the closing of the
transactions contemplated hereby (the "Closing") shall take place remotely via the exchange of
documents and signatures by electronic mail on the second (2nd) BuSiness Day following full satisfaction
or due waiver of all of the closing conditions set forth in Article VI hereof (other than those conditions
2
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031584
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
that, by their nature, cannot be satisfied until the Closing, but subject to the satisfaction or waiver of such
conditions at the Closing) or on such other date as is mutually agreeable to Parent and Company. The
date of the Closing is referred to herein as the "Closing Date".
ARTICLE II
EFFECT ON CAPITAL STOCK: MERGER CONSIDERATION: PAYMENT PROCEDURES
Section 2.01 Effect on Capital Stock.
Subject to the provisions of this Agreement, at the Effective Time, automatically by virtue of the
Merger and without any action on the part of Parent, Merger Sub, Company or any Securityholder:
(a) Each share of common stock of Merger Sub that is issued and outstanding
immediately prior to the Effective Time shall be converted into one (1) validly issued, fully paid and
nonassessable share of common stock of the Surviving Entity, and the stock of the Surviving Entity
issued pursuant to such conversion shall constitute all of the issued and outstanding shares of capital stock
of the Surviving Entity.
(b) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares and treasury stock) shall automatically and
without any further action on the part of the holder thereof be converted into the right to receive: (i) an
amount in cash, without interest, equal to the Per Share Closing Consideration; (ii) thirty days after the
Termination of Cresco Proceedings, an amount in cash, without interest, equal to the Per Share Deferred
Consideration; and (iii) thirty days after Adult Use Legalization, an amount in cash, without interest,
equal to the Per Share Adult Use Legalization Consideration.
(c) Each share of Company Series A Preferred Stock issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares and treasury stock) shall
automatically and without any further action on the part of the holder thereof be converted into the right
to receive (i) an amount in cash, without interest, equal to the Per Share Closing Consideration; (ii) thirty
days after the Termination of Cresco Proceedings, an amount in cash, without interest, equal to the Per
Share Deferred Consideration, and (iii) thirty days after Adult Use Legalization, an amount in cash,
without interest, equal to the Per Share Adult Use Legalization Consideration, multiplied by the number
of shares of Company Common Stock into which such share of Company Series A Preferred Stock is
convertible as of immediately prior to the Effective Time.
(d) Each share of Company Restricted Stock that is outstanding immediately prior to
the Effective Time will vest in full, ifunvested, and become non-forfeitable effective immediately prior to
the Effective Time and will be converted into the right to receive (i) an amount in cash, without interest,
equal to the Per Share Closing Consideration; and (ii) thirty days after the Termination of Cresco
Proceedings, an amount in cash, without interest, equal to the Per Share Deferred Consideration; and (iii)
thirty days after an Adult Use Legalization, an amount in cash, without interest, equal to the Per Share
Adult Use Legalization Consideration.
Section 2.02 Effect on Warrant.
Upon the terms and subject to the conditions of this Agreement, at the Effective Time, by virtue
of the Merger and without any further action on the part of Parent, Merger Sub, Company or any
3
-
ATTORNEYS'
CONFIDENTIAL EYES ONLY D031585
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022
Securityholder, the Company Stock Warrant, whether or not then vested or exercisable, shall
automatically be canceled and extinguished, no longer be outstanding and cease to represent the right to
acquire shares of Company Common Stock, and in consideration therefor, the holder thereof shall be
entitled to receive an amount in cash, without interest, equal to the Warrant Consideration. Company
shall, prior to the Effective Time, take all commercially reasonable actions as are necessary in order to
effectuate the actions contemplated by this Section 2.02 and to ensure that the holder of the Company
Stock Warrant shall not have any rights from and after the Effective Time with respect to the Company
Stock Warrant except as expressly provided in this Section 2.02, provided that such actions shall
expressly be conditioned upon the consummation of the Merger and each of the other transactions
contemplated hereby and shall be of no force or effect if this Agreement is terminated in accordance with
the terms hereof.
Section 2.03 Rights as Shareholders: Stock Transfers.
All shares of Company Stock, when converted as provided in Section 2.01, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to exist, and each Certificate
or Book-Entry Shares previously evidencing such shares shall thereafter represent only the right to
receive, for each such share of Company Stock, the Merger Consideration in accordance with this Article
H. At the Effective Time, holders of Company Stock shall cease to be, and shall have no rights as,
shareholders of Company, other than the right to receive the Merger Consideration as provided under this
Article II. After the Effective Time, there shall be no registration of transfers on the stock transfer books
of Company of shares of Company Stock.
Section 2.04 Surrender and Payment.
(a) Pavine Agent: Payment Fund. Prior to the Closing, Parent and Company shall
mutually appoint a paying agent (the "Paying Agent") to act as the agent for the purpose of paying the
Merger Consideration for: (i) the Certificates; and (ii) the Book-Entry Shares. At Closing, Parent shall
deposit with the Paying Agent sufficient funds to pay the aggregate Closing Consideration that is payable
in respect of (x) all of the shares of Company Stock represented by the Certificates and the Book-Entry
Shares (other than Dissenting Shares and treasury stock) and (y) the Company Stock Warrant (the
"Payment Fund") in amounts and at the times necessary for such payments. The Payment Fund shall not
be used for any other purpose. The Surviving Entity shall pay all charges and expenses, including those
of the Paying Agent, in connection with the exchange of shares of Company Stock and the Company
Stock Warrant for the Merger Consideration. Promptly after the Effective Time, Parent shall send, or
shall cause the Paying Agent to send, to each record holder of shares of Company Stock and the holder of
the Company Stock Warrant at the Effective Time, a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery
of the Certificates or transfer of the Book-Entry Shares to the Paying Agent, and which letter of
transmittal will be in customary form and have such other provisions as Parent and the Surviving Entity
may reasonably specify, including, but not limited to a representation that the Certificates and Book-Entry
Shares shall be free and clear of all Liens), in form and substance reasonably satisfactory to
Representative, for use in such exchange.
(b) Procedures for Surrender: No Interest. Each holder of shares of
Preview
FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 EXHIBIT 42 June 29, 2018 Merger Agreement between GTI and Fiorello Index No. 652343/2018 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 EXECUTION COPY AGREEMENT AND PLAN OF MERGER by and among GTI CORE, LLC, FIORELLO MERGER SUB, INC., FIORELLO PHARMACEUTICALS, INC., SIROSS LLC, AS REPRESENTATIVE, and THE SECURITYHOLDERS SET FORTH ON SCHEDULE 1 HERETO Dated as of June 29, 2018 - ATTORNEYS' CONFIDENTIAL EYES ONLY D031578 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 TABLE OF CONTENTS ARTICLE I THE MERGER........................................................................................................................2 Section 1.01 The Merger. ..........................................................................................................2 Section 1.02 Articles of Incorporation and Bylaws...................................................................2 Section 1.03 Directors and Officers of Surviving Entity. ..........................................................2 Section 1.04 Effective Time; Closing........................................................................................2 ARTICLE II EFFECT ON CAPITAL STOCK; MERGER CONSIDERATION; PAYMENT PROCEDURES ..............................................................................................................................3 Section 2.01 Effect on Capital Stock.........................................................................................3 Section 2.02 Effect on Warrant..................................................................................................3 Section 2.03 Rights as Shareholders; Stock Transfers...............................................................4 Section 2.04 Surrender and 4 Payment......................................................................................... Section 2.05 Dissenting Shares..................................................................................................6 Section 2.06 Closing Amounts..................................................................................................6 Section 2.07 Post-Closing Adjustments.....................................................................................6 ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY..........................................8 Section 3.01 Organization and Corporate Power.......................................................................8 Section 3.02 Subsidiaries; Right to Acquire Interests...............................................................8 Section 3.03 Authorization; No Breach; Valid and Binding Agreement...................................8 Section 3.04 Capitalization, Title..............................................................................................9 Section 3.05 Financial Statements.............................................................................................9 Section 3.06 Absence of Certain Developments......................................................................10 Section 3.07 Title to Assets. ....................................................................................................12 Section 3.08 Tax Matters.........................................................................................................12 Section 3.09 Contracts and Commitments...............................................................................13 Section 3.10 Intellectual 14 Property............................................................................................ Section 3.11 Litigation.............................................................................................................14 Section 3.12 Governmental Authorities; Consents..................................................................15 Section 3.13 Employee Benefit Plans......................................................................................15 Section 3.14 Compliance with Laws.......................................................................................15 Section 3.15 Undisclosed Liabilities.......................................................................................15 Section 3.16 Labor and Employment. 16 ..................................................................................... Section 3.17 Insurance.............................................................................................................16 Section 3.18 Brokerage............................................................................................................16 Section 3.19 Affiliate Transactions.........................................................................................16 Section 3.20 Certain 17 Payments................................................................................................ Section 3.21 Bank Accounts; Directors and Officers and Powers of Attorney. 17 ...................... Section 3.22 Agreements with Regulatory Agencies..............................................................17 Section 3.23 No Other Representations...................................................................................17 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB........18 Section 4.01 Making of Representations and Warranties........................................................18 Section 4.02 Organization, Standing and 18 Authority................................................................ Section 4.03 Corporate Power. ................................................................................................18 i - ATTORNEYS' CONFIDENTIAL EYES ONLY D031579 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 Section 4.04 Corporate Authority............................................................................................18 Section 4.05 Sufficiency of 19 Funds........................................................................................... Section 4.06 Litigation.............................................................................................................19 Section 4.07 Licensure.............................................................................................................19 Section 4.08 Purpose. ..............................................................................................................19 Section 4.09 Solvency. ............................................................................................................19 Section 4.10 19 Brokers................................................................................................................ ARTICLE V COVENANTS......................................................................................................................20 Section 5.01 Covenants of Company.......................................................................................20 Section 5.02 Commercially Reasonable Efforts......................................................................23 Section 5.03 Shareholder Approval.........................................................................................23 Section 5.04 Regulatory Filings; Consents..............................................................................23 Section 5.05 Publicity..............................................................................................................24 Section 5.06 Access; Information............................................................................................24 Section 5.07 No Solicitationby Company...............................................................................25 Section 5.08 Notification of Certain Changes.........................................................................25 Section 5.09 Current Information............................................................................................26 Section 5.10 Certain Litigation................................................................................................26 Section 5.11 Director and Officer Resignations......................................................................26 Section 5.12 Coordination. ......................................................................................................26 Section 5.13 Confidentiality....................................................................................................27 Section 5.14 Employee Benefits..............................................................................................27 Section 5.15 Regulatory Matters. ............................................................................................28 Section 5.16 Submission of Affidavits....................................................................................28 Section 5.17 Certain Tax Matters............................................................................................28 Section 5.18 Release................................................................................................................30 ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER...........................................32 Section 6.01 Conditions to Obligations of the Parties to Effect the Merger............................32 Section 6.02 Conditions to Obligations of Company. .............................................................32 Section 6.03 Conditions to Obligations of Parent....................................................................33 Section 6.04 Frustration of Closing Conditions.......................................................................33 ARTICLE VII TERMINATION...............................................................................................................33 Section 7.01 Termination.........................................................................................................33 Section 7.02 Delay...................................................................................................................35 Section 7.03 Effect of Termination..........................................................................................35 ARTICLE VIII INDEMNIFICATION......................................................................................................35 Section 8.01 Survival of Representations and Warranties.......................................................35 Section 8.02 Indemnification Provisions for Parent's Benefit.................................................35 Securityholders' Section 8.03 Indemnification Provisions for Benefit. ..................................36 Section 8.04 Limitations on Indemnification. .........................................................................36 Section 8.05 Indemnification and Set-off for Cresco Losses. .................................................37 ARTICLE IX MISCELLANEOUS...........................................................................................................41 ii - ATTORNEYS' CONFIDENTIAL EYES ONLY D031580 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 Section 9.01 Waiver; Amendment...........................................................................................41 Section 9.02 Governing Law; Waiver of Right to Trial by 4 1 Jury.............................................. Section 9.03 Expenses.............................................................................................................42 Section 9.04 Notices................................................................................................................42 Section 9.05 Severability.........................................................................................................42 Section 9.06 Enforcement ofthe Agreement...........................................................................43 Section 9.07 Assignment.........................................................................................................43 Section 9.08 Certain Agreements and Acknowledgements.....................................................43 Section 9.09 Director and Officer Insurance. 43 .......................................................................... Section 9.10 Investigation; Limitation on Warranties.............................................................44 Section 9.11 Counterparts........................................................................................................45 Section 9.12 No Strict Construction........................................................................................45 Section 9.13 Captions..............................................................................................................45 Section 9.14 Entire Agreement................................................................................................45 Section 9.15 Parties in Interest; Third Party Beneficiaries......................................................45 Section 9.16 Interpretation.......................................................................................................46 Section 9.17 Waiver of Conflicts.............................................................................................46 Section 9.18 Representative.....................................................................................................47 iii - ATTORNEYS' CONFIDENTIAL EYES ONLY D031581 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 Schedules Schedule 1 - Securityholders The Disclosure Schedule Exhibits Exhibit A - Certificate of Merger Exhibit B - Affiliate Guaranty Exhibit Z - Definitions iv - ATTORNEYS' CONFIDENTIAL EYES ONLY D031582 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 AGREEMENT AND PLAN OF MERGER This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of June 29, 2018, by and among GTI Core, LLC, a Delaware limited liability company ("Parent"), Fiorello Merger Sub, Inc., a New York corporation and a wholly owned subsidiary of Parent ("Merger Sub"), Fiorello Pharmaceuticals, Inc., a New York corporation ("Company"), Siross LLC, a Delaware limited liability company, solely in its capacity as the representative for Company's Securityholders (together with any successor appointed pursuant to Section 9.18, "Representative"), and the Securityholders set forth on Schedule 1 that have, concurrently with the execution and delivery of this Agreement by Parent, Merger Sub, Company and Representative, agreed to be bound by the terms of this Agreement by executing and delivering a joinder agreement to this Agreement. Parent, Merger Sub, Company and, solely in its capacity as and solely to the extent applicable, Representative, shall be referred to herein from time to "Party" time as a and collectively as the "Parties". Capitalized terms used and not otherwise defined herein have the meanings set forth in Exhibit Z attached hereto. RECITALS WHEREAS, in July 2014, Governor Andrew M. Cuomo and the New York State Legislature enacted the Compassionate Care Act to provide a comprehensive, safe and effective medical marijuana program. Under the Compassionate Care Act, five original licenses were awarded to private marijuana growers. The Compassionate Care Act was expanded in August of 2017 and five additional licenses were awarded. One of the additional licenses was awarded to Company, which permits Company to cultivate and process medical cannabis in the State of New York, as well as to establish and operate four medical cannabis dispensaries (the "Business"); WHEREAS, Parent desires to acquire one hundred percent (100%) of the issued and outstanding shares of capital stock of Company in a reverse-subsidiary merger transaction on the terms and subject to the conditions set forth herein; WHEREAS, the respective boards of directors of Company and Merger Sub have each (i) determined that the Merger is fair, advisable and in the best interests of their respective companies and shareholders and (ii) approved this Agreement and the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth herein; WHEREAS, the respective boards of directors of each of Company and Merger Sub has determined to recommend to its shareholders the approval and adoption of this Agreement and the transactions contemplated hereby, including the Merger; and WHEREAS, the board of directors of Parent has approved this Agreement and the Merger and the other transactions contemplated hereby. 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, and intending to be legally bound, the Parties agree as follows: - ATTORNEYS' CONFIDENTIAL EYES ONLY D031583 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 ARTICLE I THE MERGER Section 1.01 The Merger. At the Effective Time, on the terms and subject to the conditions of this Agreement and in accordance with all applicable Laws, Merger Sub shall merge with and into Company (the "Merger"), whereupon the separate corporate existence of Merger Sub shall cease and Company shall survive and continue to exist as a wholly owned Subsidiary of Parent (Company, as the surviving entity in the Merger, sometimes being referred to herein as the "Surviving Entity"). Section 1.02 Articles of Incomoration and Bvlaws. The articles of incorporation and bylaws of Company, as in effect immediately prior to the Effective Time, shall be the articles of incorporation and bylaws of the Surviving Entity until, subject to Section 9.09(a), thereafter amended as provided by applicable Law. Section 1.03 Directors and Officers of Survivine Entity. The directors and officers of Merger Sub, in each case, immediately prior to the Effective Time shall, from and after the Effective Time, be the directors and officers, respectively, of the Surviving Entity until their successors have been duly elected or appointed and qualified or until their earlier death, resignation, or removal in accordance with the articles of incorporation and by-laws of the Surviving Entity; provided, however, that immediately after the Effective Time, Susan Yoss and Eric Sirota shall be elected to the board of directors of the Surviving Entity and shall remain directors on the board of directors of the Surviving Entity until such time as the Deferred Consideration has been paid in full in accordance with Section 2.01(b). Parent shall take, and shall cause its Affiliates to take, all actions necessary and desirable to cause Susan Yoss and Eric Sirota to be elected and remain directors on the board of directors of the Surviving Entity in accordance with the proviso in the immediately preceding sentence, including by voting its shares in favor of the foregoing and not taking any action that would be inconsistent with the foregoing. Section 1.04 Effective Time: Closing. (a) On the terms and subject to the conditions of this Agreement, at the Closing, the Parties shall cause a certificate of merger substantially in the form of Exhibit A attached hereto (the "Certificate of Merger") to be executed, acknowledged and filed with the Department of State of the State of New York and make all such other filings or recordings as may be required by the NYBCL to consummate the Merger. The Merger shall become effective (the "Effective Time") immediately upon the filing of the Certificate of Merger with the Department of State of the State of New York. (b) At the Effective Time, Merger Sub shall be merged with and into Company, the separate existence of Merger Sub shall cease and the Surviving Entity, without further action, shall succeed to all the assets, rights, privileges, powers and franchises and be subject to all of the liabilities, restrictions, disabilities and duties of Company and Merger Sub. (c) On the terms and subject to the conditions of this Agreement, the closing of the transactions contemplated hereby (the "Closing") shall take place remotely via the exchange of documents and signatures by electronic mail on the second (2nd) BuSiness Day following full satisfaction or due waiver of all of the closing conditions set forth in Article VI hereof (other than those conditions 2 - ATTORNEYS' CONFIDENTIAL EYES ONLY D031584 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 that, by their nature, cannot be satisfied until the Closing, but subject to the satisfaction or waiver of such conditions at the Closing) or on such other date as is mutually agreeable to Parent and Company. The date of the Closing is referred to herein as the "Closing Date". ARTICLE II EFFECT ON CAPITAL STOCK: MERGER CONSIDERATION: PAYMENT PROCEDURES Section 2.01 Effect on Capital Stock. Subject to the provisions of this Agreement, at the Effective Time, automatically by virtue of the Merger and without any action on the part of Parent, Merger Sub, Company or any Securityholder: (a) Each share of common stock of Merger Sub that is issued and outstanding immediately prior to the Effective Time shall be converted into one (1) validly issued, fully paid and nonassessable share of common stock of the Surviving Entity, and the stock of the Surviving Entity issued pursuant to such conversion shall constitute all of the issued and outstanding shares of capital stock of the Surviving Entity. (b) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and treasury stock) shall automatically and without any further action on the part of the holder thereof be converted into the right to receive: (i) an amount in cash, without interest, equal to the Per Share Closing Consideration; (ii) thirty days after the Termination of Cresco Proceedings, an amount in cash, without interest, equal to the Per Share Deferred Consideration; and (iii) thirty days after Adult Use Legalization, an amount in cash, without interest, equal to the Per Share Adult Use Legalization Consideration. (c) Each share of Company Series A Preferred Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and treasury stock) shall automatically and without any further action on the part of the holder thereof be converted into the right to receive (i) an amount in cash, without interest, equal to the Per Share Closing Consideration; (ii) thirty days after the Termination of Cresco Proceedings, an amount in cash, without interest, equal to the Per Share Deferred Consideration, and (iii) thirty days after Adult Use Legalization, an amount in cash, without interest, equal to the Per Share Adult Use Legalization Consideration, multiplied by the number of shares of Company Common Stock into which such share of Company Series A Preferred Stock is convertible as of immediately prior to the Effective Time. (d) Each share of Company Restricted Stock that is outstanding immediately prior to the Effective Time will vest in full, ifunvested, and become non-forfeitable effective immediately prior to the Effective Time and will be converted into the right to receive (i) an amount in cash, without interest, equal to the Per Share Closing Consideration; and (ii) thirty days after the Termination of Cresco Proceedings, an amount in cash, without interest, equal to the Per Share Deferred Consideration; and (iii) thirty days after an Adult Use Legalization, an amount in cash, without interest, equal to the Per Share Adult Use Legalization Consideration. Section 2.02 Effect on Warrant. Upon the terms and subject to the conditions of this Agreement, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, Company or any 3 - ATTORNEYS' CONFIDENTIAL EYES ONLY D031585 FILED: NEW YORK COUNTY CLERK 01/19/2022 06:42 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 601 RECEIVED NYSCEF: 01/19/2022 Securityholder, the Company Stock Warrant, whether or not then vested or exercisable, shall automatically be canceled and extinguished, no longer be outstanding and cease to represent the right to acquire shares of Company Common Stock, and in consideration therefor, the holder thereof shall be entitled to receive an amount in cash, without interest, equal to the Warrant Consideration. Company shall, prior to the Effective Time, take all commercially reasonable actions as are necessary in order to effectuate the actions contemplated by this Section 2.02 and to ensure that the holder of the Company Stock Warrant shall not have any rights from and after the Effective Time with respect to the Company Stock Warrant except as expressly provided in this Section 2.02, provided that such actions shall expressly be conditioned upon the consummation of the Merger and each of the other transactions contemplated hereby and shall be of no force or effect if this Agreement is terminated in accordance with the terms hereof. Section 2.03 Rights as Shareholders: Stock Transfers. All shares of Company Stock, when converted as provided in Section 2.01, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each Certificate or Book-Entry Shares previously evidencing such shares shall thereafter represent only the right to receive, for each such share of Company Stock, the Merger Consideration in accordance with this Article H. At the Effective Time, holders of Company Stock shall cease to be, and shall have no rights as, shareholders of Company, other than the right to receive the Merger Consideration as provided under this Article II. After the Effective Time, there shall be no registration of transfers on the stock transfer books of Company of shares of Company Stock. Section 2.04 Surrender and Payment. (a) Pavine Agent: Payment Fund. Prior to the Closing, Parent and Company shall mutually appoint a paying agent (the "Paying Agent") to act as the agent for the purpose of paying the Merger Consideration for: (i) the Certificates; and (ii) the Book-Entry Shares. At Closing, Parent shall deposit with the Paying Agent sufficient funds to pay the aggregate Closing Consideration that is payable in respect of (x) all of the shares of Company Stock represented by the Certificates and the Book-Entry Shares (other than Dissenting Shares and treasury stock) and (y) the Company Stock Warrant (the "Payment Fund") in amounts and at the times necessary for such payments. The Payment Fund shall not be used for any other purpose. The Surviving Entity shall pay all charges and expenses, including those of the Paying Agent, in connection with the exchange of shares of Company Stock and the Company Stock Warrant for the Merger Consideration. Promptly after the Effective Time, Parent shall send, or shall cause the Paying Agent to send, to each record holder of shares of Company Stock and the holder of the Company Stock Warrant at the Effective Time, a letter of transmittal and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Book-Entry Shares to the Paying Agent, and which letter of transmittal will be in customary form and have such other provisions as Parent and the Surviving Entity may reasonably specify, including, but not limited to a representation that the Certificates and Book-Entry Shares shall be free and clear of all Liens), in form and substance reasonably satisfactory to Representative, for use in such exchange. (b) Procedures for Surrender: No Interest. Each holder of shares of