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FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023
Exhibit 9
Affirmation of Jason P. Hipp in Opposition
to Defendant’s Motion for Summary
Judgment
FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023
INDEX NO. 652343/2018
FILED : NEW YORK COUNTY CLERK 5 7:
NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------------------------- X
CRESCO LABS NEW YORK, LLC, a New :
York limited liability company, and CRESCO : Index No. 652343/2018
LABS, LLC, an Illinois limited liability :
company, : Hon. Andrew Borrok
Plaintiffs/Counterclaim Defendants, :
: AFFIRMATION OF JASON P.
v. : HIPP IN OPPOSITION TO
: DEFENDANT'S MOTION FOR
FIORELLO PHA.RMACEUTICALS, INC., a : SUMMARY JUDGMENT
New York corporation, :
:
Defendant/Counterclaimant. :
:
----------------------------------------------------------- X
I, Jason P. Hipp, being duly sworn, depose and say the following statements to be true:
1. I am an attorney at Jenner & Block, LLP and represent Cresco Labs New York,
"Cresco"
LLC and Cresco Labs, LLC (collectively, or "Plaintiffs"), in this proceeding against
Fiorello Pharmaceuticals, Inc. ("Fiorello").
2. I make these statements based on my review of the record in this case or my
personal knowledge.
3. This affirmation includes references to the transcripts of depositions taken in this
matter. Relevant excerpts from the deposition transcripts of Cresco's CEO Charles Bachtell,
Cresco's president Joseph Caltabiano, Cresco's in-house counsel John Figone, Cresco's outside
counsel Katherine Lewis, Fiorello's co-CEO Eric Sirota, Fiorello's co-CEO Susan Yoss, Fiorello
board member Daniel Siegel, Fiorello shareholder Andrew Stone, GTI's CEO and founder Ben
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Kovler, GTI's former CEO Peter Kadens, and Liberty's CFO Rene Gulliver are attached hereto as
respectively.1
Exhibits 1 through 11,
Cresco's Plan to Acquire a NY-Licensed Company
4. Cresco is a multistate operator in the regulated cannabis business. Affidavit of
Charles Bachtell ("Bachtell Aff.") ¶ 2. In 2018, in anticipation of becoming a publicly traded
company in Canada, it was essential to Cresco's plan to acquire a New York licensed company,
which would significantly expand Cresco's projected revenues, geographical footprint, and
market reach and allow Cresco to obtain an optimal valuation. Id. ¶ 6. The New York State
Department of Health ("DOH") had issued only ten licenses for the cultivation, processing, and
sale of medical cannabis. Id. ¶ 7.
5. Similarly, Cresco's competitor GTI was also planning to go public in Canada at
this time, and it also wanted to have a licensed subsidiary in either New York or Florida prior to
going public. Ex. 10 at 32:15-33:3.
6. While Cresco was negotiating the LOI with Fiorello, the last two New York
licensees were available for acquisition: Fiorello and Valley Agriceuticals, LLC ("Valley").
Bachtell Aff. ¶ 8. Under these circumstances, exclusivity was crucial to ensure Cresco would not
be left competing against other multistate operators for the last remaining target, or shut out of
New York altogether. Id. ¶ 10.
1
The exhibits to this Affirmation are numbered Exhibit 1 through 58 and 73 through 79, the
exhibits to the accompanying affidavit of Charles Bachtell are numbered Exhibit 59 through 71,
and the exhibit to the accompanying affidavit of A. Scott Davidson is numbered Exhibit 72. Any
references to lettered exhibits refer to the exhibits submitted by Fiorello in support of its motion
for summary judgment.
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Cresco and Fiorello Entered into the LOI
7. In February 2018, Cresco and Fiorello entered into an Equity Purchase Agreement
Letter of Intent ("LOI") for Cresco to acquire 100% of the outstanding shares of Fiorello for a
minimum of $22.5 million and up to $32.5 million in total consideration. Ex. A. Cresco
executed the LOI on February 14, 2018. Fiorello executed the LOI on February 15, 2018. A
true and correct copy of an email from one of Fiorello's co-CEOs with the date of the LOI's
execution is attached hereto as Exhibit 12.
8. The LOI includes a broad No-Shop Provision, which prohibited Fiorello from
discussing a transaction to sell itself to another company. Atypically, the No-Shop Provision
was mutual, meaning that Cresco was similarly prohibited from discussing the acquisition of
another New York company. Ex. A at 4. The No-Shop Provision was effective for the period
thirty business days from execution-through March 30, 2018. Id.
9. No-shop provisions are routinely negotiated to prevent bidding wars or third-party
bids from trumping the position of the potential buyer while the parties finalize a definitive
agreement. See No-Shops and Their Exceptions, Practical Law Practice Note 8-386-1078
(explaining that a no-shop provision protects a buyer by "[m]inimizing the risk of competing
deal,"
bidders interfering with its because otherwise "the deal may become more expensive for
the buyer if a competing bid is made").
10. Although the LOI was styled as a letter of intent, the LOI was expressly "intended
agreement."
to be binding on the Parties until supplanted by a definitive Ex. A at 1. Elsewhere,
nature" hereof."
the LOI referred to its "binding and the "binding provisions Id. at 4. The Court
has already held that the No-Shop Provision, at a minimum, was binding. Ex. B at 7.
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11. The LOI detailed specific payment terms, including four installments (including
amounts due after execution of the LOI, at closing, and one and two years after closing); the
form of payment (cash or, at the election of the shareholders, an amount of ownership units in
Cresco); and an additional contingent payment of up to $10 million if New York legalized adult
sales of marijuana prior to certain deadlines. Ex. A at 1-3.
Fiorello Immediately and Repeatedly Breached the No-Shop Provision
12. Document discovery has demonstrated that while the No-Shop Provision was in
effect, Fiorello's co-CEOs, Eric Sirota and Susan Yoss, had discussions with three cannabis
companies that were interested in expanding their operations to New York: Liberty Health
Sciences ("Liberty"), Sea Hunter Holdings ("Sea Hunter"), and Green Thumb Industries
("GTI").
13. Among other documents, the phone records of Sirota and Yoss demonstrate that
they had persistent discussions with third parties during the exclusivity period with Cresco. For
example, the records show that during the exclusivity period, Sirota had seven calls with Liberty
and five calls with GTL On one day during the exclusivity period, Sirota contacted GTI, GTI
sent an offer to Fiorello, and Sirota and Yoss had 15 calls with each other, three calls with their
lawyers, and a lengthy call with a Wall Street businessman who was a member of Fiorello's
preferred shareholder group. GTI's offer ultimately led to a deal with Fiorello, notwithstanding
the No-Shop Provision with Cresco. A true and correct copy (with redactions applied by
Fiorello) of Yoss's phone records from the relevant period is attached hereto as Exhibit 13. A
true and correct copy (with redactions applied by Fiorello) of Sirota's phone records from
February 10 to March 9, 2018 is attached hereto as Exhibit 14. A true and correct copy (with
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redactions applied by Fiorello) of Sirota's phone records from March 10 to April 9, 2018 is
attached hereto as Exhibit 15.
14. Liberty was a cannabis company with operations in Florida. Ex. 5 at 120:10-19.
In January 2018, Sirota and Yoss were introduced to Liberty as a company "looking at a number
market," interest"
of potential acquisitions in the US and were told that "New York is of to
Liberty's CEO, George Scorsis. A true and correct copy of the January and February 2018 email
correspondence between Sirota, Yoss, and Scorsis is attached hereto as Exhibit 16.
15. During the period the No-Shop Provision was in effect, Sirota and Yoss
communicated with Liberty via emails, telephone calls, and text messages.
a. The same day Fiorello executed the LOI with Cresco, Sirota and Scorsis emailed
each other to schedule a conference call. Id. Sirota's phone records show a call
with Scorsis's phone number, 416-721-9220, on February 15, 2018 at the time of
the scheduled call. The call lasted 20 minutes. Ex. 14 at DO27640.
b. One week later, on February 22, 2018, Sirota and Yoss met in person with Scorsis
and Liberty's CFO at a restaurant in New York. A true and correct copy of an
email scheduling an in-person meeting between Liberty and Fiorello is attached
hereto as Exhibit 17. Yoss testified that during this meeting, "[w]e didn't discuss
personally."
our business. We discussed ourselves Ex. 6 at 172:15-21. Contrary
to Yoss's testimony, Liberty's CFO testified that at this meeting, which lasted at
least one hour, Liberty informed Fiorello it was interested in acquiring Fiorello,
want."
and in response Fiorello said "Great. Here's the price we Ex. 11 at 62:7-
23.
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c. On March 2, Scorsis texted Sirota, "We are sending you an unsolicited in[] [the]
hours."
next 24 Ex. AA.
d. Twelve minutes later, Sirota called Scorsis, and they spoke for eight minutes. h
14 at DO27645.
e. Within 24 hours of the text message and call, Scorsis emailed Fiorello a proposed
letter of intent. Ex. BB. Liberty's LOI had a purchase price of $27.5 million-an
amount precisely $5 million more than the Cresco LOI. Id. at D013095.
Liberty's LOI also included an exclusivity provision. Id. at D013097.
f. Later on March 3, Yoss texted Sirota: "The offer is much better..thinking about
it."
how we can consider An exceÆt of a true and correct copy (with redactions
applied by Fiorello) of Yoss's text messages with Sirota is attached hereto as
Exhibit 18.
g. Sirota called Scorsis on March 9. They spoke for four minutes. Ex. 14 at
DO27647.
h. Sirota called Scorsis on March 12. They spoke for seven minutes. Ex. 15 at
DO27658.
i. On March 14, Scorsis texted Sirota: "Hey Eric, I am still thinking about this. Can
hr."
I call you in 1 Ex. AA. Scorsis and Sirota had three calls that evening. Ex.
1.5 at DO27659. Sirota denied that he discussed a possible acquisition with
Scorsis during those three calls (two days before Scorsis sent him a revised letter
of intent), and testified instead that the conversations were "building a business
relationship" network."
to help his "cannabis Ex. 5 at 178:12-17.
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j. On March 15, Scorsis emailed Liberty's CFO with instructions about how to
email Fiorello in a way that would "make it appear as if we have not had
discussions."
A true and correct copy of that March 15 Liberty email is attached
hereto as Exhibit 19.
k. Liberty's CFO then sent Fiorello a revised proposed letter of intent Liberty on
March 16, in a manner consistent with the instructions from Scorsis the previous
day. Ex. DD. The revised proposed letter of intent had similar terms to the initial
proposed letter of intent, but it removed the exclusivity provision. Dan Siegel,
Fiorello's outside board member, testified that he recalled that, after the Cresco
"nonexclusivity"
LOI, Fiorello's directors were interested in because the Fiorello
up"
board did not want to "tie ourselves and felt that being bound to exclusivity
month."
with Cresco had "wasted a Ex. 7 at 253:19-254:2, 256:3-9.
1. On March 17, Yoss emailed Andrew Stone, an experienced and successful Wall
Street businessman influential in Fiorello's preferred shareholder group, about the
process,"
"sale writing that she was "Moving ahead on Cresco. The other party is
complicated."
still interested, but it is getting a bit too A true and correct copy of
that email is attached hereto as Exhibit 20. During her deposition, Yoss claimed
party"
not to know what her email meant or who "the other was. Ex. 6 at 203:15-
19, 204:10-11.
16. With respect to Sea Hunter, Fiorello sent email communications about and with
Sea Hunter during the period the No-Shop Provision was in effect.
a. The morning that Fiorello executed the LOI with Cresco, a Fiorello shareholder
forwarded an email to Sirota and Yoss about Sea Hunter's current operations and
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its plans to expand to eight other states. A true and correct copy of Fiorello's
February 15, 2018 emails regarding Sea Hunter is attached hereto as Exhibit 21.
Yoss replied to Sirota: "We should contact them today....before we
sign...Agree?"
Id. Ten minutes later, Sirota emailed Cresco to inform them that
he had executed the LOI. Eight minutes later, Yoss emailed Sirota in response to
late?????"
her prior email about contacting Sea Hunter, asking "Too Id. A true
and correct copy of Sirota's February 15, 2018 email confirming he had executed
the LOI with Cresco, sent in between Yoss's two emails, is attached hereto as
Exhibit 22.
b. Two days later, Yoss emailed Robert Leidy, Sea Hunter's CEO, to request an in-
person meeting. A true and correct copy of an email exchange including Yoss's
February 17, 2018 email to the CEO of Sea Hunter requesting an in-person
meeting is attached hereto as Exhibit 23.
c. On February 22, 2018, Leidy met with Sirota and Yoss at Fiorello's WeWork
office in New York, NY. A true and correct copy of a February 22, 2018 email
from WeWork notifying Yoss that Sea Hunter's CEO had arrived at the office is
attached hereto as Exhibit 24.
d. Later that day, Fiorello signed a non-disclosure agreement with Sea Hunter stating
that "Sea Hunter Holdings LLC and Fiorello Pharmaceutical Inc. desire to discuss
transaction." non-
a possible A true and correct copy of the February 22, 2018
disclosure agreement signed by Fiorello and Sea Hunter is attached hereto as
Exhibit 25.
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FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 Exhibit 9 Affirmation of Jason P. Hipp in Opposition to Defendant’s Motion for Summary Judgment FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7: NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------- X CRESCO LABS NEW YORK, LLC, a New : York limited liability company, and CRESCO : Index No. 652343/2018 LABS, LLC, an Illinois limited liability : company, : Hon. Andrew Borrok Plaintiffs/Counterclaim Defendants, : : AFFIRMATION OF JASON P. v. : HIPP IN OPPOSITION TO : DEFENDANT'S MOTION FOR FIORELLO PHA.RMACEUTICALS, INC., a : SUMMARY JUDGMENT New York corporation, : : Defendant/Counterclaimant. : : ----------------------------------------------------------- X I, Jason P. Hipp, being duly sworn, depose and say the following statements to be true: 1. I am an attorney at Jenner & Block, LLP and represent Cresco Labs New York, "Cresco" LLC and Cresco Labs, LLC (collectively, or "Plaintiffs"), in this proceeding against Fiorello Pharmaceuticals, Inc. ("Fiorello"). 2. I make these statements based on my review of the record in this case or my personal knowledge. 3. This affirmation includes references to the transcripts of depositions taken in this matter. Relevant excerpts from the deposition transcripts of Cresco's CEO Charles Bachtell, Cresco's president Joseph Caltabiano, Cresco's in-house counsel John Figone, Cresco's outside counsel Katherine Lewis, Fiorello's co-CEO Eric Sirota, Fiorello's co-CEO Susan Yoss, Fiorello board member Daniel Siegel, Fiorello shareholder Andrew Stone, GTI's CEO and founder Ben 1 1 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 I'ILED : NEW YORK COUNTY CLERK 5 7: NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 Kovler, GTI's former CEO Peter Kadens, and Liberty's CFO Rene Gulliver are attached hereto as respectively.1 Exhibits 1 through 11, Cresco's Plan to Acquire a NY-Licensed Company 4. Cresco is a multistate operator in the regulated cannabis business. Affidavit of Charles Bachtell ("Bachtell Aff.") ¶ 2. In 2018, in anticipation of becoming a publicly traded company in Canada, it was essential to Cresco's plan to acquire a New York licensed company, which would significantly expand Cresco's projected revenues, geographical footprint, and market reach and allow Cresco to obtain an optimal valuation. Id. ¶ 6. The New York State Department of Health ("DOH") had issued only ten licenses for the cultivation, processing, and sale of medical cannabis. Id. ¶ 7. 5. Similarly, Cresco's competitor GTI was also planning to go public in Canada at this time, and it also wanted to have a licensed subsidiary in either New York or Florida prior to going public. Ex. 10 at 32:15-33:3. 6. While Cresco was negotiating the LOI with Fiorello, the last two New York licensees were available for acquisition: Fiorello and Valley Agriceuticals, LLC ("Valley"). Bachtell Aff. ¶ 8. Under these circumstances, exclusivity was crucial to ensure Cresco would not be left competing against other multistate operators for the last remaining target, or shut out of New York altogether. Id. ¶ 10. 1 The exhibits to this Affirmation are numbered Exhibit 1 through 58 and 73 through 79, the exhibits to the accompanying affidavit of Charles Bachtell are numbered Exhibit 59 through 71, and the exhibit to the accompanying affidavit of A. Scott Davidson is numbered Exhibit 72. Any references to lettered exhibits refer to the exhibits submitted by Fiorello in support of its motion for summary judgment. 2 2 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 Cresco and Fiorello Entered into the LOI 7. In February 2018, Cresco and Fiorello entered into an Equity Purchase Agreement Letter of Intent ("LOI") for Cresco to acquire 100% of the outstanding shares of Fiorello for a minimum of $22.5 million and up to $32.5 million in total consideration. Ex. A. Cresco executed the LOI on February 14, 2018. Fiorello executed the LOI on February 15, 2018. A true and correct copy of an email from one of Fiorello's co-CEOs with the date of the LOI's execution is attached hereto as Exhibit 12. 8. The LOI includes a broad No-Shop Provision, which prohibited Fiorello from discussing a transaction to sell itself to another company. Atypically, the No-Shop Provision was mutual, meaning that Cresco was similarly prohibited from discussing the acquisition of another New York company. Ex. A at 4. The No-Shop Provision was effective for the period thirty business days from execution-through March 30, 2018. Id. 9. No-shop provisions are routinely negotiated to prevent bidding wars or third-party bids from trumping the position of the potential buyer while the parties finalize a definitive agreement. See No-Shops and Their Exceptions, Practical Law Practice Note 8-386-1078 (explaining that a no-shop provision protects a buyer by "[m]inimizing the risk of competing deal," bidders interfering with its because otherwise "the deal may become more expensive for the buyer if a competing bid is made"). 10. Although the LOI was styled as a letter of intent, the LOI was expressly "intended agreement." to be binding on the Parties until supplanted by a definitive Ex. A at 1. Elsewhere, nature" hereof." the LOI referred to its "binding and the "binding provisions Id. at 4. The Court has already held that the No-Shop Provision, at a minimum, was binding. Ex. B at 7. 3 3 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 11. The LOI detailed specific payment terms, including four installments (including amounts due after execution of the LOI, at closing, and one and two years after closing); the form of payment (cash or, at the election of the shareholders, an amount of ownership units in Cresco); and an additional contingent payment of up to $10 million if New York legalized adult sales of marijuana prior to certain deadlines. Ex. A at 1-3. Fiorello Immediately and Repeatedly Breached the No-Shop Provision 12. Document discovery has demonstrated that while the No-Shop Provision was in effect, Fiorello's co-CEOs, Eric Sirota and Susan Yoss, had discussions with three cannabis companies that were interested in expanding their operations to New York: Liberty Health Sciences ("Liberty"), Sea Hunter Holdings ("Sea Hunter"), and Green Thumb Industries ("GTI"). 13. Among other documents, the phone records of Sirota and Yoss demonstrate that they had persistent discussions with third parties during the exclusivity period with Cresco. For example, the records show that during the exclusivity period, Sirota had seven calls with Liberty and five calls with GTL On one day during the exclusivity period, Sirota contacted GTI, GTI sent an offer to Fiorello, and Sirota and Yoss had 15 calls with each other, three calls with their lawyers, and a lengthy call with a Wall Street businessman who was a member of Fiorello's preferred shareholder group. GTI's offer ultimately led to a deal with Fiorello, notwithstanding the No-Shop Provision with Cresco. A true and correct copy (with redactions applied by Fiorello) of Yoss's phone records from the relevant period is attached hereto as Exhibit 13. A true and correct copy (with redactions applied by Fiorello) of Sirota's phone records from February 10 to March 9, 2018 is attached hereto as Exhibit 14. A true and correct copy (with 4 4 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 redactions applied by Fiorello) of Sirota's phone records from March 10 to April 9, 2018 is attached hereto as Exhibit 15. 14. Liberty was a cannabis company with operations in Florida. Ex. 5 at 120:10-19. In January 2018, Sirota and Yoss were introduced to Liberty as a company "looking at a number market," interest" of potential acquisitions in the US and were told that "New York is of to Liberty's CEO, George Scorsis. A true and correct copy of the January and February 2018 email correspondence between Sirota, Yoss, and Scorsis is attached hereto as Exhibit 16. 15. During the period the No-Shop Provision was in effect, Sirota and Yoss communicated with Liberty via emails, telephone calls, and text messages. a. The same day Fiorello executed the LOI with Cresco, Sirota and Scorsis emailed each other to schedule a conference call. Id. Sirota's phone records show a call with Scorsis's phone number, 416-721-9220, on February 15, 2018 at the time of the scheduled call. The call lasted 20 minutes. Ex. 14 at DO27640. b. One week later, on February 22, 2018, Sirota and Yoss met in person with Scorsis and Liberty's CFO at a restaurant in New York. A true and correct copy of an email scheduling an in-person meeting between Liberty and Fiorello is attached hereto as Exhibit 17. Yoss testified that during this meeting, "[w]e didn't discuss personally." our business. We discussed ourselves Ex. 6 at 172:15-21. Contrary to Yoss's testimony, Liberty's CFO testified that at this meeting, which lasted at least one hour, Liberty informed Fiorello it was interested in acquiring Fiorello, want." and in response Fiorello said "Great. Here's the price we Ex. 11 at 62:7- 23. 5 5 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 c. On March 2, Scorsis texted Sirota, "We are sending you an unsolicited in[] [the] hours." next 24 Ex. AA. d. Twelve minutes later, Sirota called Scorsis, and they spoke for eight minutes. h 14 at DO27645. e. Within 24 hours of the text message and call, Scorsis emailed Fiorello a proposed letter of intent. Ex. BB. Liberty's LOI had a purchase price of $27.5 million-an amount precisely $5 million more than the Cresco LOI. Id. at D013095. Liberty's LOI also included an exclusivity provision. Id. at D013097. f. Later on March 3, Yoss texted Sirota: "The offer is much better..thinking about it." how we can consider An exceÆt of a true and correct copy (with redactions applied by Fiorello) of Yoss's text messages with Sirota is attached hereto as Exhibit 18. g. Sirota called Scorsis on March 9. They spoke for four minutes. Ex. 14 at DO27647. h. Sirota called Scorsis on March 12. They spoke for seven minutes. Ex. 15 at DO27658. i. On March 14, Scorsis texted Sirota: "Hey Eric, I am still thinking about this. Can hr." I call you in 1 Ex. AA. Scorsis and Sirota had three calls that evening. Ex. 1.5 at DO27659. Sirota denied that he discussed a possible acquisition with Scorsis during those three calls (two days before Scorsis sent him a revised letter of intent), and testified instead that the conversations were "building a business relationship" network." to help his "cannabis Ex. 5 at 178:12-17. 6 6 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 j. On March 15, Scorsis emailed Liberty's CFO with instructions about how to email Fiorello in a way that would "make it appear as if we have not had discussions." A true and correct copy of that March 15 Liberty email is attached hereto as Exhibit 19. k. Liberty's CFO then sent Fiorello a revised proposed letter of intent Liberty on March 16, in a manner consistent with the instructions from Scorsis the previous day. Ex. DD. The revised proposed letter of intent had similar terms to the initial proposed letter of intent, but it removed the exclusivity provision. Dan Siegel, Fiorello's outside board member, testified that he recalled that, after the Cresco "nonexclusivity" LOI, Fiorello's directors were interested in because the Fiorello up" board did not want to "tie ourselves and felt that being bound to exclusivity month." with Cresco had "wasted a Ex. 7 at 253:19-254:2, 256:3-9. 1. On March 17, Yoss emailed Andrew Stone, an experienced and successful Wall Street businessman influential in Fiorello's preferred shareholder group, about the process," "sale writing that she was "Moving ahead on Cresco. The other party is complicated." still interested, but it is getting a bit too A true and correct copy of that email is attached hereto as Exhibit 20. During her deposition, Yoss claimed party" not to know what her email meant or who "the other was. Ex. 6 at 203:15- 19, 204:10-11. 16. With respect to Sea Hunter, Fiorello sent email communications about and with Sea Hunter during the period the No-Shop Provision was in effect. a. The morning that Fiorello executed the LOI with Cresco, a Fiorello shareholder forwarded an email to Sirota and Yoss about Sea Hunter's current operations and 7 7 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 795 RECEIVED NYSCEF: 02/17/2023 INDEX NO. 652343/2018 FILED : NEW YORK COUNTY CLERK 5 7 : NYSCEF DOC. NO. 699 RECEIVED NYSCEF: 05/06/2022 its plans to expand to eight other states. A true and correct copy of Fiorello's February 15, 2018 emails regarding Sea Hunter is attached hereto as Exhibit 21. Yoss replied to Sirota: "We should contact them today....before we sign...Agree?" Id. Ten minutes later, Sirota emailed Cresco to inform them that he had executed the LOI. Eight minutes later, Yoss emailed Sirota in response to late?????" her prior email about contacting Sea Hunter, asking "Too Id. A true and correct copy of Sirota's February 15, 2018 email confirming he had executed the LOI with Cresco, sent in between Yoss's two emails, is attached hereto as Exhibit 22. b. Two days later, Yoss emailed Robert Leidy, Sea Hunter's CEO, to request an in- person meeting. A true and correct copy of an email exchange including Yoss's February 17, 2018 email to the CEO of Sea Hunter requesting an in-person meeting is attached hereto as Exhibit 23. c. On February 22, 2018, Leidy met with Sirota and Yoss at Fiorello's WeWork office in New York, NY. A true and correct copy of a February 22, 2018 email from WeWork notifying Yoss that Sea Hunter's CEO had arrived at the office is attached hereto as Exhibit 24. d. Later that day, Fiorello signed a non-disclosure agreement with Sea Hunter stating that "Sea Hunter Holdings LLC and Fiorello Pharmaceutical Inc. desire to discuss transaction." non- a possible A true and correct copy of the February 22, 2018 disclosure agreement signed by Fiorello and Sea Hunter is attached hereto as Exhibit 25. 8 8 of 26 FILED: NEW YORK COUNTY CLERK 02/17/2023 07:04 PM