### TS Falcon I, LLC v Golden Mtn. Fin. Corp. 2024 NY Slip Op 30386(U) February 1, 2024 Supreme Court, New York County Docket Number: Index No. 655783/2023 Judge: AndreaMasley Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local governmentsources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.NYSCEF DOC. NO. 109



### SUPREMECOURT OF THE STATE OF NEWYORK COUNTY OFNEWYORK: COMMERCIALDIVISIONPART

### 48

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TS FALCON I, LLC, INDEX NO. Plaintiff, MOTION DATE

- V - INDEX NO. 655783/2023 RECEIVED NYSCEF: 02/01/2024

655783/2023

GOLDEN MOUNTAIN FINANCIAL CORP., GOLDEN MOUNTAIN FINANCIAL HOLDINGS CORP., and GMF MIDCO, LLC, MOTION SEQ. NO. 001 DECISION+ORDERON MOTION Defendants.

-----------------------------------------------------------------------------------X HON. ANDREA MASLEY: Thefollowing e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,50,51,52,53,54,65, 66,67 were read on this motion to/for INJUNCTION/RESTRAINING ORDER Uponthe foregoing documents, itis PlaintiffTS Falcon I, LLC moves pursuant to CPLRArticle 63 for a preliminary injunction enjoining defendants Golden Mountain Financial Corp. (OpCo), Golden Mountain Financial Holdings Corp. (HoldCo) and GMF Midco, LLC (MidCo, together with HoldCo, Guarantors) from "(1) further breaching the Revolving Loan and Security Agreement, dated January22, 2021; (2) effectuating a transaction between Defendants,
on the one hand, and Halsa Holdings, LLC or lgaldl, Ltd [Halsa] and their affiliates, on the other; and (3) taking any action to dissipate Plaintiff's collateral in Defendants." (NYSCEF 4, Proposed OSC at 5; NYSCEF 3, Koplewicz aff

### ,I5.)

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Background INDEX NO. 655783/2023 RECEIVED NYSCEF: 02/01/2024

Plaintiff is a secured lenderto OpCo1, the borrower; HoldCo and MidCo are the guarantors. (NYSCEF 1, Complaint

### ,i1 .) Plaintiff holds less than 50% ofOpCo's
common stock. 

### (Id. 

### ,I42.) OpCo's most significant assets are deferred tax credits and net operating losses (collectively NOLs) which can be used by an entitywith significant
revenue to offset tax obligations subject to federal incometax limitations; defendants cannot sell the NOLs. 

### (Id. 

### ,i,i30, 46.) The NOLs are valueless unless defendants operate an income generating business oracquire an earning asset. (NYSCEF 44, Govindan2 aff

### ,i9.) On January22, 2021, plaintiff entered a revolving loan and securityagreement (Agreement) for up to $5 million with FNBC. 

### (Id. 

### ,i,i14- 15; NYSCEF 1, Complaint

### ,I27.) The purpose ofthe loan was to cover expenses for a transaction to monetize the NOLs. (NYSCEF 44, Govindan aff

### ,i12.) The parties also entered into a January21, 2021 agreement with defendants giving plaintiff an option to take up to an 84.9 % stake in OpCo on January24, 2024. 

### (Id. 

### ,i,i45-48; NYSCEF 46, Subscription Agreement.) On March 17, 2021, plaintifffiled a UCC statement. (NYSCEF 3, Koplewicz aff 

### ,I14.) The secured collateral is described in Annex Bto the Agreementwhich includes 18 categories ofassets; relevant here are "all general intangibles." (NYSCEF 7, Agreement at 21/43. 3) Pursuantto the Agreement, plaintiff loaned $1 million on January22, 2021, $250,000 on February 8, 2022, $200,000 on December 28, 2022 and

1 In March 2021, when First NBC Bank Holding Company (FNBC) emerged from bankruptcy, FNBC became OpCo, awholly owned subsidiary of HoldCo. (NYSCEF 1, Complaint

### ,i13.) 2 Shivan Govindan is defendants' "chairman." (NYSCEF 44, Govindan aff

### ,i1 .) 3 NYSCEF pagination.

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$85,000 on October25, 2023. (NYSCEF 1, Complaint 

### ,i,i27, 38.) OpCo made a partial payment in March 2022, but neveragain. 

### (Id. ,I29.) On June 2, 2023, plaintiffsent a notice ofdefaults as of March 31, 2023 asserting
avariety ofdefaults including failure to: "(i) pay Falcon the accrued interest owed on the applicable due dates since March 31, 2023, as required by Section 7(a) ofthe Loan Agreement; (ii) to use its best efforts to workdiligentlywith the Transferor Stockholder to reach resolution regarding its purported transfers; (iii) to pay amounts that OpCo owed under aseparate agreement; and (iv) hold an annual meeting ofstockholders by January31, 2023, as required by Section 7(b) ofthe Loan Agreement as reflected in Amendment No. 3 to the Loan Amendment." 

### (Id. ,I32.) On June 8, 2023, plaintiffsent a payoff letter demanding $2 million and again on August 26, 2023 for$2,073,957. 4 

### (Id. ,i,i34, 37.) On October26, 2023, plaintiff exercised the option to take the entire 84.9 % stake in OpCo. (NYSCEF 47, Option Notice.) On October30, 2023, HoldCo amended its bylaws to require wide-ranging disclosures for nominees to the board ofdirectors and raised the ownership threshold from 10% to 47% for shareholders to call special stockholder meetings. (NYSCEF 1, Complaint, 

### ,I42.) On November 15, 2023, plaintiff received a notice to stockholders for
a December 1, 2023 meeting (Notice) at which "HoldCo will seekstockholderapproval (i) for a cashless transaction between OpCo and affiliates of Halsa Holdings, LLC5 (the 'Halsa Merger'); (ii) to form asubsidiary ofOpCo; (iii) for OpCo to obtain additional financing from a third-party lender; and (iv) to amend and restate OpCo's Certificates of

4 By December8, 2023, the payoffamount grewto $3,536,425 ofwhich approximately $1.5 million were from legal fees. (NYSCEF 45, December 8, 2023 Letter.) 5 Halsa is a California cannabis company. (NYSCEF 44, Govindan aff

### ,I42.)

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lncorporation."6 (NYSCEF 1, Complaint ,I45.) Defendants did not obtain plaintiff's consent. (NYSCEF 3, Koplewicz aff,I27.) Plaintiffobjects to the proposed transaction with Halsa, which according to the Notice is cashless, forms a subsidiaryto OpCo, OpCo obtains additional financing, and amends OpCo's certificate of incorporation, all without plaintiff's consent. (NYSCEF 1, Complaint ,I45.) Koplewicz asserts that "OpCo'sfailure to cure its defaults is an attempt to prevent Falcon from (1) taking steps to protect the collateral securing its loan and (2) exercising its rights as a substantial stockholder, as well as a lenderto OpCo." (NYSCEF 3, Koplewicz ,I24.) This Action Plaintiff initiated this action on November22, 2023 alleging (1) breach ofcontract against defendants forfailure to (i) "complywith Sections 5 and 9 ofthe Loan Agreement;" (ii) "hold an annual stockholders meeting by January31, 2023;" (iii) "use best efforts to workdiligentlywith the Transferor Stockholderto reach resolution regarding its purported transfers;" and (iv) forthe amendmentto HoldCo's "bylaws without Falcon's consent to, among otherthings, (a) require that nominationsfor its board ofdirectors include extensive disclosures that are overly burdensome and go beyond those typically required for a private company and (b) make it more difficult for stockholders- particularly Falcon that holds

... percent of HoldCo's common stock-to call a special meeting ofstockholders by increasing the required ownership threshold from ten (10) percent to forty-seven (47) percent ofshares entitled to vote;" (2) breach

6 Defendants are also in discussionswith lgadl, a Colorado cannabis company, but that is not mentioned in the Notice. 

### (Id. ,I42.)

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ofcontract againstthe Guarantors for the same reasons; (3) anticipatory breach of contract against OpCo and Guarantors on the ground that defendants are seeking shareholderapproval without consent to: "(i) enter into the Halsa Merger, pursuant to which it will form a subsidiary ofOpCo, in violation of Sections 12(i) and 12(1); (ii) transfer and dissipate OpCo's NOLs and, thereby, taking action that is reasonably expected to impair any intangible asset ofOpCo and HoldCo, in violation of Sections 12(h) and 12(m); (iii) permit Falcon's first priority security interestto be subjectto claims ofother persons and entities, in violation ofSections 10(b) and 12(h); and (iv) to amend and restate OpCo's Certificate of Incorporation, in violation of Section 12(q);" and (4) indemnification. (NYSCEF 1, Complaint, 

### ,i,i51, 54-60, 66-69.) Damages are allegedly $2.3 million. (Id. at 17.) For injunctive relief under CPLR 6301, the movant must establish likelihood of
success on the merits ofthe action; the danger of irreparable harm in the absence ofa preliminary injunction; and a balance ofequities in favor ofthe moving party. (Gliklad v Cherney, 97 AD3d 401,402 [1st Dept 2012] [citations omitted].) "A preliminary injunction should not be granted unless the right thereto is plain from the undisputed facts and there is a clear showing of necessity and justification." (O'Hara v Corporate AuditCo., 161 AD2d 309, 310 [1st Dept 1990] [citations omitted].) Likelihood ofSuccess A cause ofaction for breach of contract requires plaintiffto demonstrate "the existence of a contract, the plaintiff's performance thereunder, the defendant's breach thereof, and resulting damages." (Harris vSewardParkHaus. Corp., 79 AD3d 425, 426 [1st Dept 2010] [citation omitted].)

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Plaintiffsatisfies the first requirement for a breach ofcontract claim: the Agreement is a contract between the parties and defendants are responsible for repayment offunds plaintiff loaned. Defendants contend that the Agreement is unenforceable dueto plaintiff's misrepresentations to GMFC that induced GMFC to enterthe loan underfalse pretenses. However, this argument is barred by the Agreement's integration clause (§15). (See Gen. BankvMarkII Imports, Inc., 293 AD2d 328, 328 [1st Dept 2002] [fraudulent inducement claim "is, as a matterof law, foreclosed by an integration clause"].) Likewise, the Agreement is not void under GOL §5-501(6)(b) --NewYork's criminal usury laws-which applies to loans under $2.5 million. Here, the amount due is $3.5 million, including legal fees which plaintiff is permitted to add to the amount due. (NYSCEF 7, Agreement §13.) In any case, though the principal amount loaned to date is under $2.5 million, plaintiffagreed to loan up to $5 million. (See SpecFin Mgmt. LLC
vElhadidy, 201 AD3d 31, 42 [3rd Dept 2021] [usury laws inapplicable where lender agreed to provide up to $2.5 million but onlyadvanced $370,472.13].) Finally, these highlysophisticated and well-represented parties, who negotiated for 60 days (NYSCEF 66, Koplewicz 

### ,TB), are not the intended beneficiaries ofthis provision - "borrowers who need ordeserve protection." (NML Capital vRepublic ofArgentina, 621 F3d 230, 239 [2d Cir201

### O].) Defendants contend that plaintiff is preventing defendantsfrom monetizing the NOLs by rejecting all of defendants' proposed transactions and failing to propose any transactions-effectivelyasserting that plaintiff breached first. (NYSCEF 44, Govindan

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aff

### ,i,i19, 23, 39.) Plaintiff counters that it brought Halsa to the bargaining table. (NYSCEF 66, Koplewicz aff,I7.) A movant cannot establish a likelihood ofsuccess on the merits where there are "sharp issues offact." (Res. Bd. ofMgrs. ofthe Columbia Condo. vAlden, 178 AD2d 121, 123 [1st Dept 1991]; see also Sussman Educ., Inc. v Gorenstein, 175 AD3d 1188, 1189-90 [1st Dept 2019] [holding that itwas an improvident exercise ofthe court's discretion to grant a preliminary injunction where parties raised "sharp issues offact" concerning defendant's alleged breaches].) However, while the purported issue offact here-whether plaintiff breached the Agreement first by failing to cooperate in finding an appropriate transaction - would typically preclude a preliminary injunction, defendants do not contradict plaintiff's assertion that plaintiff has in fact cooperated. 7 In his surreply affidavit, Colon discusses the two years of negotiations with defendants. (NYSCEF

__, Colon aff

### ,i,i4, 5.) In Govindan's sur-reply affidavit, he states that he has known Halsa for several years and began discussing a merger in 2021. (NYSCEF

__, Govindan aff,I4.) However, neither Colon norGovindan dispute that plaintiff introduced defendantto Halsa. As to defendants' breach, it is undisputed that defendants have failed to make payments required by §5 ofthe Agreement, failed to hold an annual stockholder

7 On the record on December21, 2023, the court invited defendantsto submit an agreement as defendants' statements as to what the transaction would look like were amorphous, and thus, insufficient. Instead, defendants submitted the affidavits of Christoper Colon, Halsa's CEO, and Govindan, neitherofwhich annexed an agreement or even a term sheet. The affiants merely repeat, with more details, their aspirations. Admittedly, there is no funderwhich would pay off plaintiff's loan. (NYSCEF

__, Govindan aff

### ,i,i8-9; NYSCEF

__ Colon aff,i10.) Accordingly, the court treats the affidavits as sur replies. Defendants shall file the Govindan and Colon affidavit in NYSCEF. Plaintiffshall file its December26, 2023 letter in NYSCEF.

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meeting by January31, 2023, failed to use best efforts to work diligentlywith the Transferor Stockholderto reach resolution regarding transfers, and amended their bylaws without plaintiff's consent. Therefore, at this stage on this record, it appears that plaintiffwill likelysucceed on its first cause ofaction. The Guarantors guaranteed payment only and their promise to pay is irrevocable and unconditional. (NYSCEF 7, Agreement §9.) Defendants fail to address plaintiff's claim which constituteswaiver. Therefore, plaintiffwill likelysucceed on the guarantee in the second cause ofaction. The indemnification provision clearly provides that defendants are responsible for legal fees to enforce the Agreement. (NYSCEF 7, Agreement §13.) Defendants fail to address this argumentwhich constituteswaiver. Therefore, plaintiffwill likelysucceed
on its indemnification claim. "An anticipatory breach ofa contract
... can be eithera statement by the obligor to the obligee indicating that the obligorwill commit a breach that would of itselfgivethe obligee a claim for damages for total breach or avoluntary affirmative actwhich renders the obligor unable orapparently unable to perform without such a breach." (Princes PointLLC vMuss Dev. L.L.C., 30 NY3d 127, 133 [2017] [internal quotation marks and citations omitted].) Holdco's Notice unequivocally demonstrates its intent to seek: (1) stockholder approval forthe cashless Halsa Merger, (2) additional financing from a third-party lender, and (3) to amend and restate OpCo's Certificates of Incorporation. However, HoldCo has not requested plaintiff's written consent to the Halsa Merger, as required by §12 ofthe Agreement. Therefore, plaintiff is likelyto succeed on its third
cause ofaction.

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Irreparable Harm INDEX NO. 655783/2023 RECEIVED NYSCEF: 02/01/2024

Plaintiffasserts that dissipation ofthe value ofthe NOLswill cause irreparable harm to plaintiff. Defendants challenge plaintiff's irreparable injury. First, defendants assertthat plaintiff can be compensated by moneydamageswhich precludes irreparable injury. However, plaintiffasserts that its collateral will be dissipated by the Halsa transaction which can be an exception to the bar against a preliminary injunction when moneydamages are available. "[A] secured creditor does have a legally recognized interest in preventing dissipation ofencumbered property" which constitutes irreparable harm. (White Oak CommercialFinance, LLC vEIA Inc., 2023 WL 4149527, *7, 2023 NY Slip Op 32088(U), 11 [Sup Ct, NY County 2023], citing Winchester Glob. Tr. Co. vDonovan, 58 AD3d 833, 834 [2d Dept 2009] ["holding that injunctive reliefwas properly granted as the uncontrolled disposition ofassets 'would threaten to render ineffectual anyjudgment which the plaintiff might obtain' in an action by a secured partyto set aside allegedly fraudulent conveyances made 'in derogation ofthe plaintiffs perfected security interest"']; see also Goldman Sachs Bank USA vSchreiber, 2022 WL 60650, *3 [Sup Ct, NY County 2022] [granting preliminary injunction enjoining the transfer ofassets where plaintiff, a secured creditor, soughtto prevent a dissipation ofcollateral, and the sale ofsuch assets in direct contravention ofagreements would cause irreparable harm "bytaking awaythe value ofthe collateral"].) It is undisputed that the purpose ofthe Halsa transaction is to monetize the NOLs, butthat meansthat the NOL'swill be used to offset Halsa's revenue which

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necessarily decreasesthe NOLs. Therefore, plaintiff has stated irreparable harm ifthe NOLs are plaintiff's encumbered property. Second, defendants challenge whetherthe NOLs are collateral underthe Agreement, and, if not, then dissipation ofthe NOLswill not irreparably harm plaintiff. Defendants argue that plaintiff's UCC filing8 did not securitize the NOLs because it cannot file a UCC on NOLs. Relying on CityofChicago vMichigan Beach Housing Coop, 242 Ill App3d 636 (App Court, First Dist, Second Div 1993), defendants assert that NOLs are not general intangibles underthe UCC. In CityofChicago, Chicago sued a cooperative building to which Chicago had loaned funds in exchange for a security interest in the building. (Id.) Chicago soughtto recoup syndication funds from the limited partnership that subsequently acquired the building based on Chicago's security interest in the building. (Id.) The Illinois Court held that "the tax credits at issue cannot serve as collateral because they are not general intangible personal property. Taxcredits, as Randallinstructs us, have no independentvalue in and ofthemselves; instead, they are an incidental benefit that investors receive when they purchase a security evidencing their interest in a limited partnership. The investors cannot transfer orsell the tax credits separate from the security itself. The limited partnership did not 'sell' the tax credits to the investors; the tax credits remain exactlywhere they resided before the sale ofthe securities, in the limited partnership. Accordingly, it is clearthat the NTC defendants in this case did not purchase and do not own tax credits; instead, they bought and now possess securities which gave them an interest in the Michigan Beach Limited Partnership."

8 The UCC statement provides: "[t]his financing statement covers the following collateral: All assets ofthe Debtorwhether now existing or hereafterarising or acquired." (NYSCEF 9, UCC Statement.)

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(Id. at 647.) In Randall vLoftsgaarden, 478 US 647 (1986), which addressed whether tax credits constitute income under §12(2) ofthe Securities Act of 1933, the U.S. Supreme Courtfound that "[t]he tax benefits attributable to ownership ofa security initiallytake the form of tax deduction credits. These have no value in themselves; the economic benefit to the investor-thetrue 'tax benefit'-arises because the investor mayoffset tax deductions againstincome received from othersources or use tax credits to reduce the taxes otherwise payable on account ofsuch income. Unlike payments in cash or property received byvirtue ofownership ofa security-such as distributions or dividends in stock, interest on bonds, ora limited partner's distributed share ofthe partnership's capital gains or profits-the 'receipt' oftax deductions orcredits is not itselfa taxable event, forthe investor has received no money orother 'income' within the meaning ofthe Internal Revenue Code. ****** Respondents essentially ask us to treat tax benefits as a separate assetthat is acquired when a limited partner purchases a share in a tax shelter partnership. But the legal form ofthe transaction does not reflect this treatment. Petitioners purchased securities, thereby acquiring freely alienable rights to any incomethat accrued to them byvirtue oftheir ownership. They did not, however, also acquire a separate, freely transferable bundle oftax losses thatwould havevalue apartfrom petitioners' status as partners. For obvious reasons, taxdeductions and tax credits are not, in the absence ofa statutory provision to the contrary, freelytransferable from one person to another ifwhollysevered from the property

... to which they relate

.... Accordingly, we decline to treat these taxlosses as so muchpropertycreatedbythe promoters ofthe partnership." (Id. at 656-57, 666-67 [emphasis added].) The courtfinds defendants' cases distinguishable. In the CityofChicago, Chicago's security interest in the building could not be expanded to include tax credits which were attached to defendants' subsequent partnership securities. Likewise, in Randall, petitioners purchased securities with tax credits attached to them and the case did not involve the UCC. Here, the circumstances are significantly different, and thus,

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the court finds thatthe NOLs constitute general intangibleswhich are very clearly the intended collateral underthe Agreement and were secured by the UCC statement. This is a case about NOLs. Defendants concede that "[t]he value of GMFC's NOLs can only be realized by GMFC and under certain limited conditions, such as, by operating ataxable incomegenerating business oracquiring a significant earning asset base. Without such a business, GMFC's NOLs will remain unutilized and Golden Mountain remains completely dependent on the Falcon to fund its operations through the Loan Agreement." (NYSCEF 44, Govindan aff,I38.) Defendants acknowledge that their "mostvaluable assets are GMFC's NOLs." (Id.; see also NYSCEF 50, Defendants' MOL at 10.) Indeed, the NOLs are effectively defendants' only asset. According to plaintiffs "OpCo does not engage in any significant business operations or have any revenue streams. Thus, the Company's most significant assetfrom which it could reasonably expect to realize value and pursuant to which Falcon could recoup its loan proceeds are the NOLs. The NOLs are ofsignificantvalue because, subjectto certain federal income tax limitations, they can be used by an entitywith significant revenue to offset its tax obligations. Accordingly, it is a significant asset that could serve as consideration for a potential transaction with a companywith significant revenue streams that would not only provide value to its stockholders but also enable Falcon to be repaid in full." (NYSCEF 1, Complaint ,I46.) The court is guided, as it must be, by the Agreement. Annex B describes the Collateral as follows: "All General Intangibles" and "all other personal property and rights of every kind." (NYSCEF 7, Agreement Annex B (g), (r) at 21/43.) Annex B also provides that should "the definition ofany category and type ofcollateral" be "expanded by the UCC," then that expanded definition applies to this Agreement. (Id.) Under Article 9 ofthe UCC, a "general intangible" is "any personal property, including things in action, otherthan accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of

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credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software. (UCC § 9-102[42].) The UCC classifies property into three categories: (i) real property, (ii) fixtures, and (iii) personal property, but the NOLs are clearly neither real property norfixtures, necessarily making them personal property. Defendants also insisttherewill be no irreparable harm because plaintiff's loan will be paid as a condition ofthe Halsa transaction. Without the loan, plaintiffwill have
no securitized assets, and thus, the NOLs cannot be dissipated from plaintiff's perspective. As discussed above and on the record on December 21, 2023, the court has no evidence ofsuch an agreement, otherthan the aspirational statements from defendants. Moreover, there is no evidence that the parties have located funding to pay offthe loan. (See NYSCEF

__, Colon aff,i10.) Finally, plaintiff has established nonspeculative irreparable harm from defendants' corporate governance changes and changes to the bylaws. (See BroadwayAssocs vParkRoyal Owners, Inc., 2002 NY Misc LEXIS 2114, *11-12 [Sup Ct, NY County 2002] [holding that "[a] corporate shareholderwho has been wrongfully denied the fundamental right to vote theirshares and gain representation on the board ofdirectors is presumed to be threatened with irreparable harm" where the corporate electoral process is tainted.]; see also BankofNYCo vIrving Bank Corp, 139 Misc 2d 665 [Sup Ct, NY County 1988].) Balance of Equities "In orderfor a preliminary injunction to issue it must be shown that the irreparable injuryto be sustained by the plaintiff is more burdensome to it than the harm caused to

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defendantthrough imposition ofthe injunction." (Nassau Roofing 

### & SheetMetalCo., Inc. vFacilitiesDev. Corp., 70AD2d 1021, 1022 [3d Dept 1979] [citation omitted].) Plaintiffasserts that its collateral will be impaired without the preliminary injunction. Defendants challenge whether plaintiffwill be harmed at all. Defendants' argument presumes that the loan will be paid in full, but as discussed above, the court has no such evidence. Certainly, granting the preliminary injunction will impede the Halsa transaction, but it will not interfere with finding anothertransaction, nor restructuring the HaIsa transaction in such awaythat plaintiffwould consent. Therefore, the court finds that the equities favor plaintiff. Finally, while the court accepts defendants' recitation ofthe procedural history of the Delaware actions involving plaintiff's rights as a shareholder and option holder under Delaware law, defendants do not request any relief orofferany law applicable to this preliminary injunction motion. Instead, defendants assertthat they intend to movefor a stay ofthis action in favor ofthe Delaware action. Therefore, there is nothing before the court on which the court can determinethat the Delaware action precludes this action. Accordingly, it is ORDERED thatthe parties shall file in NYSCEF the affidavits and lettersent to the court by email on December 26, 2023; and it is further ORDERED that plaintiff's motion for a preliminary injunction is granted; and it is furtherORDERED thatthe undertaking is fixed in the sum of$3.5 million conditioned that the plaintiff, if it is finally determined that he it was not entitled to an injunction, will

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payto defendants all damages and costs which may be sustained by reason ofthis injunction; and it is further ORDERED thatdefendants, their agents, servants, employees and all other persons acting underthejurisdiction, supervision and/ordirection ofdefendant, are enjoined and restrained, during the pendency ofthis action, from doing orsuffering to be done, directlyorthrough any attorney, agent, servant, employee orother person underthe supervision orcontrol ofdefendantorotherwise, any ofthe following acts: (1) further breaching the Revolving Loan and SecurityAgreement, dated January 22, 2021; (2) effectuating a transaction between Defendants, on the one hand, and Halsa Holdings, LLC or lgaldl, Ltd and their affiliates, on the other; and/or (3) taking anyaction to dissipate Plaintiff's collateral in Defendants; and it is further ORDERED thatthe parties are directed to submitthe December21, 2023 transcript byfiling it in NYSCEF and emailing the court; and it is further ORDERED that counsel are directed to appearfor a preliminary conference on February 20, 2024 at 10 AM unlessthe parties file a PC orderon consent priorto that date.

2/1/2024 DATE ANDREA MASLEY, J.S.C. CHECKONE:

APPLICATION: CHECK IF APPROPRIATE: CASE DISPOSED GRANTED**□** DENIED SETTLE ORDER INCLUDES TRANSFER/REASSIGN NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARYAPPOINTMENT

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