EFiled: Dec 06 2023 03:40PMEEST!>
`Transaction ID 71551054 weam i)
`
`Case No.2023-1060-NAC 2seehDy
`EXHIBIT 1
`EXHIBIT 1
`~
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`EFiled: Dec 06 2023 03:40PM EST
`Transaction ID 71551054
`Case No. 2023-1060-NAC
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`

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`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`
`
`
`
`D1 JASPER HOLDINGS LP, D1 SPV
`JL MASTER LP, JAY BLOCKER
`LTD., JAY DOMESTIC LLC, GCCU
`II LLC, TOCU XX LLC, OC II FIE
`VIII LP, JL SPV HOLDINGS, LLC,
`EMS JINV LLC, DISRUPTIVE
`TECHNOLOGY SOLUTIONS XIV,
`LLC, DISRUPTIVE TECHNOLOGY
`SOLUTIONS XVI, LLC–SERIES A,
`DISRUPTIVE TECHNOLOGY
`SOLUTIONS XVI, LLC–SERIES B,
`and DISRUPTIVE TECHNOLOGY
`SOLUTIONS XVI, LLC–SERIES C,
`
`
`
`Plaintiffs,
`
`v.
`JUUL LABS, INC.,
`
`
`
`Defendant.
`
`C.A. No. 2023-1060-NAC
`
`
`
`
`
`SUBPOENA DUCES TECUM
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`TO: Centerview Partners LLC
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`c/o Cogency Global Inc.
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`850 New Burton Road, Suite 201
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`Dover, DE 19904
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`This subpoena is issued in the above-captioned matter pursuant to Court of
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`Chancery Rules 26, 30, and 45. Court of Chancery Rules 45(c) and (d) set forth your
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`protections and duties with respect to this subpoena and are attached hereto, along
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`with Schedule A.
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`

`
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`YOU ARE HEREBY COMMANDED: To produce and permit inspection
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`
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`and copying of designated documents, electronically-stored information, or tangible
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`things in your possession, custody or control identified in the attached Schedule A
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`on or before December 13, 2023, at the office of Wilks Law LLC, 4250 Lancaster
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`Pike, Suite 200, Wilmington, DE 19805 or such other location or date as may be
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`agreed by the parties or ordered by the Court.
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`
`Dated: December 6, 2023
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`
`
`
`
`WILKS LAW, LLC
`
`
`
`
`
`
`
`
`
`
`
` /s/ D. Charles Vavala, III
`David E. Wilks (Bar No. 2793)
`Andrea S. Brooks (Bar No. 50640
`D. Charles Vavala, III (Bar No. 6098)
`4250 Lancaster Pike, Suite 200
`Wilmington, DE 19805
`Telephone: (302) 225-0850
`Email: dwilks@wilks.law
`Email: abrooks@wilks.law
`Email: cvavala@wilks.law
`
`Attorneys for Plaintiffs D1 Jasper
`Holdings LP, D1 SPV JL Master LP,
`Jay Blocker LTD., Jay Domestic LLC,
`GCCU II LLC, TOCU XX LLC, OC II
`FIE VIII LP, JL SPV Holdings, LLC,
`EMS JINV LLC, Disruptive
`Technology Solutions XIV, LLC,
`Disruptive Technology Solutions XVI,
`LLC–Series A, Disruptive Technology
`Solutions XVI, LLC–Series B, and
`Disruptive Technology Solutions XVI,
`LLC–Series C
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`
`
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`2
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`Court of Chancery Rule 45(c) and (d):
`(c) Protection of persons subject to subpoenas.
`(1) A party or an attorney responsible for the issuance and service of a
`subpoena shall take reasonable steps to avoid imposing undue burden or expense on
`a person subject to that subpoena. The court on behalf of which the subpoena was
`issued shall enforce this duty and may impose upon the party or attorney in breach
`of this duty an appropriate sanction, which may include, but is not limited to, lost
`earnings and a reasonable attorney’s fee.
`(2)(A) A person commanded to produce and permit inspection and copying
`of designated documents, electronically stored information, or tangible things
`or inspection of premises need not appear in person at the place of production
`or inspection unless commanded to appear for deposition, hearing or trial.
`(B) Subject to paragraph (d)(2) of this rule, a person commanded to produce
`and permit inspection and copying may, within 14 days after service of the subpoena
`or before the time specified for compliance if such time is less than 14 days
`after service, serve upon the party or attorney designated in the subpoena
`written objection to inspection or copying of any or all of the designated materials
`or of the premises. If objection is made, the party serving the subpoena shall not be
`entitled to inspect and copy the materials or inspect the premises except pursuant to
`an order of the court by which the subpoena was issued. If objection has been made,
`the party serving the subpoena may, upon notice to the person commanded to
`produce, move at any time for an order to compel production. Such an order to
`compel production shall protect any person who is not a party or an officer of a party
`from significant expense resulting from the inspection and copying commanded.
`(3)(A) On timely motion, the court on behalf of which the subpoena was issued shall
`quash or modify the subpoena if it (i) fails to allow reasonable time for compliance;
`(ii) requires disclosure of privileged or other protected matter and no exception or
`waiver applies; or (iii) subjects a person to undue burden. (B) If a subpoena
`(i) requires disclosure of a trade secret or other confidential research, development,
`or commercial information, or (ii) requires disclosure of an unretained expert’s
`opinion or information not describing specific events or occurrences in dispute and
`resulting from the expert’s study made not at the request of any party, the court on
`behalf of which the subpoena was issued may, to protect a person subject to or
`affected by the subpoena, quash or modify the subpoena or, if the party in
`whose behalf the subpoena is issued shows a substantial need for the testimony or
`material that cannot be otherwise met without undue hardship and assures that the
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`person to whom the subpoena is addressed will be reasonably compensated, the
`Court may order appearance or production only upon specified conditions.
`(d) Duty in responding to subpoena.
`(1) If a subpoena does not specify a form for producing documents or electronically
`stored information, the person responding shall produce it in a form or forms
`in which it is ordinarily maintained, or in which it is reasonably usable.
`Absent a showing of good cause, the person responding need not produce the same
`documents or electronically stored information in more than one form. The person
`responding need not provide discovery of documents or electronically stored
`information from sources that the person identifies as not reasonably accessible
`because of undue burden or cost. On a motion to compel discovery or for a
`protective order, the person responding to a subpoena must show that the
`information is not reasonably accessible because of undue burden or cost. If
`that showing is made, the Court nevertheless may order discovery from such
`sources if the requesting party shows good cause. The Court may specify the
`conditions for the discovery.
`(2) When information subject to a subpoena is withheld on a claim that it is
`privileged or subject to protection as trial preparation materials, the claim shall be
`made expressly and shall be supported by a description of the nature of the
`documents, electronically stored information, or tangible things not produced that is
`sufficient to enable the demanding party to contest the claim.
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`SCHEDULE A
`DEFINITIONS
`Unless otherwise indicated, the following Definitions apply to the
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`Requests:
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`1.
`
`2.
`
`“Action” means the above-captioned litigation.
`
`“Advanced Notice” means the notice described in the first
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`sentence of Section 3.1.1 of the Form of Convertible Promissory Note,
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`attached as Exhibit A to the NPA.
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`3.
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`“Advisor” means any and all, accountants, administrators,
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`auditors, bankers, investment banks, consulting firms, consultants, law firms,
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`lawyers, lenders, financial advisors, valuation appraisers, and/or other
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`financial, public relations, or other professionals any Person engaged,
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`retained, employed or consulted, regardless of whether pursuant to any formal
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`engagement letter or informal agreement or arrangement.
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`4.
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`“Affiliate” means, with respect to any Person, any other
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`Person that, directly or indirectly, through one or more intermediaries,
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`controls, is controlled by, or is under common control with the specified
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`Person, including but not limited to each and every present and former general
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`partner, corporate parent, subsidiary, and successor-in-interest, as well as any
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`member of the Person’s family, and any Persons owned or controlled by the
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`Person and/or any member(s) of the Person’s family, or in which such Person
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`and/or members of his/her family are beneficiaries. For purposes of this
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`definition, the term “control” means a majority voting position and/or the
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`possession, directly or indirectly, of the power to direct or cause the direction
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`of the management, policies or actions of a Person, whether through
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`ownership of voting stock, by contract or otherwise.
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`5.
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`“Alternative Transaction” means any actual, potential,
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`proposed, or considered
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`transaction, other
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`than
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`the
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`transaction(s)
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`contemplated under the (i) Backstop Agreement, (ii) Guaranty Agreement,
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`(iii) Proposed Financing, and/or (iv) Term Loan Repayment, as the context
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`may require.
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`6.
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`“Backstop Agreement” means the Backstop Purchase
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`Agreement by and among JUUL Labs, Inc., JL Tao LLC, BIH Fund 2 LLC,
`
`PHR Investments LLC, and JLI Invest, LLC, dated December 7, 2022,
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`including any ancillary agreements and contracts entered into in connection
`
`therewith, and any transactions contemplated thereunder and in relation
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`thereto.
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`7.
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`8.
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`“Board” means the board of directors of JUUL Labs, Inc.
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`“Communication” means any act or
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`instance of
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`transferring, transmitting, passing, delivering, or giving information (in the
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`form of facts, ideas, inquiries, or otherwise) by oral, written, or electronic
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`means, including statements, admissions, denials, inquiries, discussions,
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`conversations, negotiations, agreements, contracts, notes (handwritten, typed,
`
`or otherwise), summaries, memoranda, reports, presentations, submissions or
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`filings to any government agency or entity, understandings, meetings, or any
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`other direct or indirect disclosure in any form, including audio, video, digital,
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`electronic, oral, or paper form, and any draft Communication in such form,
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`whether or not the Communication was ever disclosed, sent, or transmitted.
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`9.
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`“Complaint” means the Verified Complaint filed in this
`
`Action. A public version of the Complaint is attached hereto as Exhibit 1.
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`10.
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`“Concerning” means relating to, referring to, describing,
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`evidencing, or constituting.
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`11.
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`“Conversion Notice” means the letter from JUUL to
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`holders of the Notes, dated October 16, 2023, including Annex 1 attached
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`thereto.
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`12.
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`“Document” is used in the broadest possible sense
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`permissible under Court of Chancery Rule 34 and includes each and every
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`written, recorded or graphic matter or material of any kind, type, nature, or
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`description (whether in tangible, hard copy, printed or electronic form) that is
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`or has been in Your possession, custody or control, including all hard copy
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`3
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`Documents, ESI, correspondence, memoranda, tapes, stenographic or
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`handwritten notes, forms of any kind, charts, blueprints, drawings, sketches,
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`graphs, plans, articles, specifications, diaries, letters, telegrams, photographs,
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`minutes, contracts, agreements, electronic mail, Bloomberg messages, instant
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`messages, calendars, appointment books, computer files, computer printouts,
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`data compilations of any kind, teletypes, telexes, facsimiles, invoices, order
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`forms, checks, drafts, statements, credit memos, reports, position reports,
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`summaries, surveys,
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`indices, books,
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`ledgers, notebooks, schedules,
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`transparencies, recordings, catalogs, advertisements, promotional materials,
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`films, video tapes, audio tapes, CDs, computer disks or diskettes, things,
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`brochures, pamphlets or any written or recorded materials of any other kind,
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`however stored, recorded, produced, or reproduced (whether in tangible, hard
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`copy, printed or electronic form), and also including drafts or copies of any of
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`the foregoing that contain any notes, comments, or markings of any kind not
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`found on the original Documents or that are otherwise not identical to the
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`original Documents.
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`13.
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`“Guaranty Agreement” means the Guaranty by and among
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`BIH Fund 2 LLC, JL Tao LLC, PHR Investments LLC, JLI Invest, LLC, and
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`JLI National Settlement Trust, dated December 7, 2022, including any
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`ancillary agreements and contracts entered into in connection therewith, and
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`any transactions contemplated thereunder and in relation thereto.
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`14.
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`“Insider” means Nicholas J. Pritzker, Riaz Valani, James
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`Monsees, or Adam Bowen, individually or collectively, as the context may
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`require.
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`15.
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`“Insider Entity” means (i) JL Tao LLC, (ii) JL Special,
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`LLC, (iii) BIH Fund 2 LLC, (vi) BIH Fund LLC, (v) Ploom Investment, LLC,
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`(vi) Ploom Investment II, LLC, (vii) PHR Investments LLC, (viii) JLI Invest,
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`LLC, (ix) JL Invest, LLC, or (x) any other Affiliates of any Insider,
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`individually or collectively, as the context may require.
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`16.
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`“JUUL” mean Defendant JUUL Labs, Inc. and each and
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`all of its current and former officers, directors, partners, employees, agents,
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`representatives, attorneys, shareholders, subsidiaries, affiliates, divisions,
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`predecessors, successors, members, accountants, consultants, and any other
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`Persons or entities acting or purporting to act on its behalf.
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`17.
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`“Notes” means Convertible Promissory Notes issued by
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`JUUL in 2019 and 2020 pursuant to the NPA and 2019 NPA.
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`18.
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`“2019 NPA” means the Note Purchase Agreement dated
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`as of August 2, 2019, by and among JUUL Labs, Inc. and certain investors
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`identified therein.
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`19.
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`“NPA” means the Note and Warrant Purchase Agreement,
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`dated February 3, 2020, by and among JUUL Labs, Inc. and certain investors
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`identified therein.
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`20.
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`“Person” means any natural person or any legal entity,
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`including any corporation, partnership, limited liability company, joint
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`venture, association, joint-stock company, trust, unincorporated organization,
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`government (including all instrumentalities, officers, agents, and subdivisions
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`thereof), and all other business, legal, or artificial entities.
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`21.
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`“Proposed Financing” means the transaction described in
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`the Conversion Notice.
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`22.
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`“Qualified Financing” has the meaning set forth in Section
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`1.43 of the NPA.
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`23.
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`“Term Loan Repayment” means JUUL’s repayment of its
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`then-existing term loans in or around September 2022, as alleged in
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`paragraphs 46 and 47 of the Complaint.
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`24.
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`“You,” “Your,” and “Centerview” means Centerview
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`Partners LLC and each and all of its current and former officers, directors,
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`managers, partners,
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`employees,
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`agents,
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`representatives,
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`attorneys,
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`shareholders, subsidiaries, affiliates, divisions, predecessors, successors,
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`members, accountants, consultants, trustees, and any other Persons or entities
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`acting or purporting to act on its behalf or to direct its activities.
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`INSTRUCTIONS
`The following Instructions apply to each Request set forth below:
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`1.
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`If any Document is withheld on the grounds of privilege,
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`work product or otherwise, identify the following: (a) the kind of Document
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`(e.g., memorandum, letter, notes, electronic mail, etc.) that is being withheld;
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`(b) the date of the Document or, if no date appears thereon, the approximate
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`date the Document was created; (c) the identity of the author(s); (d) the
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`identity of the Person(s) to whom the Document is addressed; (e) the identity
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`of any other recipients of the Document; (f) the subject matter or the
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`information contained in the Document; (g) the nature of the privilege or
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`immunity asserted, or the other grounds for withholding the Document,
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`including, if relevant, the attorney and the client involved; and (h) any
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`additional information necessary to enable the Court to adjudicate the
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`propriety of the claim of privilege. If a portion of a Document contains
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`information subject to a claim of privilege, only that portion shall be redacted
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`and the remainder shall be produced, and the information listed above shall
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`be provided with respect to the redacted portion.
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`2.
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`Each Document requested herein must be produced in its
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`entirety and without deletion, abbreviation, redaction, expurgation, or
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`excisions, regardless of whether You consider the entire Document to be
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`relevant or responsive to these Requests. If You have redacted any portion of
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`a Document for privilege or because it contains confidential personal
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`identifying information protected by law, stamp the word “Redacted for
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`Privilege” or “Redacted–PII,” respectively, on each page of the Document.
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`All privilege redactions must be included in a privilege log in the manner
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`described above, and should describe the privilege basis for the redaction and
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`all information necessary for Plaintiffs to assess the basis for the redaction.
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`You may not redact for responsiveness.
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`3.
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`You
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`are
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`to
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`produce
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`entire Documents
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`and
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`Communications including all attachments, enclosures, exhibits, cover letters,
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`memoranda, and appendices. In the case of email attachments, if either the
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`email or any of its attachments is responsive, You must produce the email and
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`all of the corresponding attachments.
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`4.
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`Documents produced in response to these Requests shall
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`be produced as they are kept in the usual course of business or shall be
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`organized and labeled to indicate the specific paragraph(s) of the Requests to
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`which they respond. The original or one copy of each Document is requested
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`to be produced. Any copy of a Document that varies in any way from the
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`original or from any other copy of the Document, whether by reason of
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`handwritten or other notation or any omission, shall constitute a separate
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`Document and must be produced.
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`5.
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`These Requests are continuing in nature, up to and during
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`the course of the trial in this Action scheduled for March 13 and 14, 2024.
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`Any Documents created or obtained after the date of production are to be
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`produced immediately upon the creation or identification of additional
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`responsive Documents.
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`6.
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`All Documents shall be produced in the form and manner
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`set forth in Appendix A attached hereto, or in such other format and manner
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`as the parties may agree.
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`7.
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`If, in responding to these Requests, You claim any
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`ambiguity in a Request, or in a Definition or Instruction applicable to a
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`Request, such claim shall not be utilized as a basis for refusing to respond, but
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`You shall set forth as part of Your response the language deemed to be
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`ambiguous and the interpretation used in responding to the Request.
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`8.
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`Each Request shall be construed according to its own
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`terms, subject to these Definitions and Instructions. Although some of the
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`Requests may overlap with others, no Request should be read as limiting any
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`other.
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`RELEVANT TIME PERIOD
`Unless otherwise specified, these Requests seek Documents
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`created, sent, received, or modified from June 1, 2022 through the present
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`(“Relevant Time Period”).
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`REQUESTS
`Documents sufficient
`to show
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`1.
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`the scope,
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`terms,
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`compensation, and circumstances of Your retention by JUUL,
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`the
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`Independent Committee, and/or any other committee of the Board.
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`2.
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`All Documents and Communications, including but not
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`limited to materials, presentations, and analysis (including all drafts thereof)
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`You prepared, disseminated, or received, involving or concerning (i) the
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`Backstop Agreement; (ii) the Guaranty Agreement; (iii) the Term Loan
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`Repayment; (iv) the Proposed Financing, (v) a Qualified Financing, or (vi)
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`any Alternative Transaction.
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`3.
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`All Documents and Communications
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`involving or
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`concerning the NPA, 2019 NPA, or the Notes.
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`4.
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`All Documents and Communications concerning any
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`proposed, potential, or actual transaction involving JUUL, on the one hand,
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`and any of the Insiders or Insider Entities, on the other.
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`5.
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`All Communications between You and the Insiders or the
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`Insider Entities concerning or involving JUUL.
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`6.
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`All Documents and Communications concerning Your
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`efforts made at the direction or on behalf of JUUL to raise capital or obtain
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`financing (whether in the form of debt, equity, or otherwise).
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`EXHIBIT 1
`EXHIBIT 1
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`

`

`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`
`D1 JASPER HOLDINGS LP, D1 SPV JL
`MASTER LP, JAY BLOCKER LTD.,
`JAY DOMESTIC LLC, GCCU II LLC,
`TOCU XX LLC, and OC II FIE VIII LP,
`Plaintiffs,
`
`v.
`
`JUUL LABS, INC.,
`
`Defendants.
`
`C.A. No. 2023-1060-NAC
`REDACTED VERSION FILED:
`October 24, 2023
`
`VERIFIED COMPLAINT
`D1 Jasper Holdings LP, D1 SPV JL Master LP, Jay Blocker Ltd., Jay
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`Domestic LLC, GCCU II LLC, TOCU XX LLC, and OC II FIE VIII LP (together,
`
`“Plaintiffs”), for their complaint against Defendant JUUL Labs, Inc. (“JUUL” or the
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`“Company”),1 allege as follows:
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`NATURE OF THE ACTION
`Plaintiffs bring this action to enjoin an attempt by JUUL to
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`1.
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`wrongfully convert JUUL’s debt held by Plaintiffs into equity worth a fraction of its
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`value, which JUUL has indicated it intends to do in 8 days, as early as October 27,
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`1 By bringing this Complaint against the sole Defendant JUUL, Plaintiffs seek the
`expeditious resolution by this Court of their application for injunctive relief. Plaintiffs
`expressly preserve and do not waive or intend to waive any of their rights to assert any
`and all claims against and to seek all available remedies, whether legal or equitable,
`against JUUL and the Insiders (as defined herein), including any entities controlled by
`them, and Plaintiffs expect to pursue all appropriate claims against such parties.
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`EFiled: Oct 24 2023 04:04PM EDT
`Transaction ID 71179818
`Case No. 2023-1060-NAC
`
`

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`2023. The attempted conversion of Plaintiffs’ debt instruments is prohibited by the
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`applicable agreement and represents only the latest step in a lengthy scheme by
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`certain JUUL insiders to plunder the Company for their own benefit.
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`2.
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`Plaintiffs are investment funds that bought notes (the “Notes”)
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`that Defendant JUUL, the e-cigarette company, issued in 2019 and 2020. The Notes
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`are governed by a Note and Warrant Purchase Agreement, dated as of February 3,
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`2020, by and among JUUL and the investors thereto (the “Note Purchase
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`Agreement”).
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`3.
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`This is an action to stop JUUL’s improper attempts to cause the
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`conversion of the Notes to equity at a significantly inflated valuation—in violation
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`of the terms of the Note Purchase Agreement—for the benefit of certain insiders:
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`Adam Bowen, James Monsees, Nicholas J. Pritzker, and Riaz Valani (together, the
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`“Insiders”), who will inject capital at a fraction of the valuation at which JUUL
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`intends to convert the Notes.
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`4.
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`The purported conversion of the Notes is the latest in a series of
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`conflicted transactions in which the Insiders have leveraged a distressed situation for
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`their own personal gain to the detriment of JUUL’s other stakeholders.
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`5.
`
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` JUUL and its Insiders have been subject to ongoing and extensive
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`litigation with respect to JUUL’s marketing practices, including a multi-district
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`litigation involving thousands of plaintiffs, as well as investigations by almost every
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`state attorney general in the United States.
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`6.
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`Initially, in mid-2021, four state attorneys general entered into
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`settlement agreements with JUUL; however, the settlement agreement executed by
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`the attorney general for North Carolina notably did not release claims against the
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`Insiders in their individual capacities, and shortly thereafter the North Carolina
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`attorney general brought such claims against the Insiders.
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`7.
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`Since that time, the Insiders have leveraged their positions to
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`shield themselves from personal liability in every subsequent settlement negotiation
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`undertaken by JUUL, including with respect to claims brought against them that
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`likely would not be indemnifiable by JUUL.
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`8.
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`From September 2022 through April 2023, JUUL settled billions
`
`of dollars of these contingent litigation claims. Each settlement agreement is
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`explicitly predicated on obtaining releases for the benefit not only of JUUL, but also
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`of the Insiders.
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`9.
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`Second, the Insiders obtained control of both JUUL’s board
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`process and its capital structure. Certain of the Insiders—through entities that they
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`control—personally refinanced JUUL’s first-lien term loan and used their positions
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`on the board to negotiate a financing package favorable to them as lenders.
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`10. Third, the Insiders have also leveraged their positions to fund an
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`equity investment in JUUL
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`—in a plain attempt to capture any upside for themselves to the detriment of
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`JUUL’s other stakeholders.
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`11. The Insiders agreed to fund this equity investment under the
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`guise of providing JUUL with the liquidity necessary to fund various settlement
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`agreements. The Insiders, including the Insiders on JUUL’s board, participated in
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`bringing about those settlements in the first place, which settlements personally
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`benefited them. But the economic circumstances reveal the Insiders’ true motive:
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`to capture for themselves the potentially significant upside in JUUL’s business by
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`investing at a trough valuation at the expense of the holders of more than $1.9 billion
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`of JUUL’s outstanding Notes.
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`12. On October 16, 2023, JUUL informed noteholders that it intends
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`to forcibly convert their Notes to equity
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`13. This final step in the scheme violates the terms of the Note
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`Purchase Agreement. Under that agreement, JUUL is prohibited from automatically
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`converting the Notes unless there is a “Qualified Financing.” Such a Qualified
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`Financing must be a “Capital Raising Transaction,” bringing in at least $500 million
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`in new money from outsiders. The Note Purchase Agreement unambiguously
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`defines a Capital Raising Transaction as “a transaction or series of related
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`transactions in which the Company sells capital stock of the Company to investors
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`for cash . . . excluding . . . shares issued to employees or directors of, or consultants
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`or advisors to, the Company or any of its subsidiaries,” such as the Insiders.
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`14. The Note Purchase Agreement’s strict limitations on the types of
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`investments that may result in an automatic conversion of the Notes reflect a
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`fundamental agreement that such a conversion may be effected only upon a true,
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`third-party investment that supplies a reliable, arms-length valuation of the
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`Company. Here, as discussed below, JUUL’s demonstrated intent is to effect an
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`automatic conversion based on a transaction led by the Insiders and designed for
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`their benefit.
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`15. At 11:04 p.m. on October 16, JUUL notified noteholders that it
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`intends to close a financing
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` on or about October 27, 2023,
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`which JUUL’s notice conclusorily asserts will be a Qualified Financing resulting in
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`JUUL’s automatic conversion of the Notes.
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`16. But any attempt by JUUL to consummate a Qualified Financing
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`predicated on a notice period triggered by delivery of this deficient notice would be
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`improper. JUUL’s deficient notice has in and of itself breached the Notes, which
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`require that any notice of conversion include “a summary of the principal terms” of
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`the proposed financing. The notice failed to comply with this requirement. Among
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`other reasons, it fails to include information necessary to determine whether the
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`proposed financing meets the requirements for a Qualified Financing, such as the
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`identities of the investors or the amount of their contributions. A basic purpose of
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`the Notes’ requirement that any notice supply “a summary of the principal terms” of
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`the proposed financing is to permit noteholders to determine whether such a
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`financing results in an automatic conversion that would fundamentally affect their
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`rights.
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`17. And the reason the notice excludes critical information is clear:
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`the proposed financing does not meet the requirements for a Qualified Financing
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`because less than $500 million of the financing is coming from outside sources.
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`Based on information previously relayed by the Company, and the notice’s silence
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`on the Company’s financing counterparties, it is clear that the bulk of the proposed
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`financing will be supplied by the Insiders or entities they control. Those investments
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`do not count toward a Qualified Financing because the Insiders are or were Company
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`directors at all material times and/or serve as advisers or consultants to the Company.
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`18. Plaintiffs seek relief from this Court to preserve the status quo by
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`enjoining the Company from converting the Notes while Plaintiffs pursue the dispute
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`resolution process provided for in the Note Purchase Agreement. Plaintiffs are
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`compelled to seek the Court’s assistance because the time-consuming dispute
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`resolution provision in the underlying agreement does not permit meaningful relief
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`for Plaintiffs in these circumstances. The dispute resolution provisions, as discussed
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`below, impose a mandatory 60-day period before a party can pursue arbitration,
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`during which time the parties are required to engage in discussions and mediation.
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`On October 19, 2023, Plaintiffs served a notice of dispute upon the Company,
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`initiating the dispute resolution process pursuant to the Note Purchase Agreement.
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`19. Here, JUUL has announced that it intends to effect a conversion
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`of the Notes as early as October 27, 2023. Plaintiffs will suffer imminent and
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`irreparable harm if the Notes are converted before this dispute can be adjudicated by
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`being deprived of their contractual rights and benefits under the Notes, which may
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`not be readily restored. The Company, by contrast, will suffer no meaningful harm
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`if the status quo is preserved. It is free to raise capital and, on information and belief,
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`it has ready and available funds supplied by the Insiders to satisfy any litigation
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`settlements when required to do so. The Company should be enjoined from effecting
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`any automatic conversion of the Notes, which would fundamentally alter the capital
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`structure to Plaintiffs’ detriment in a way that will be difficult—if not impossible—
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`to undo.
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`JURISDICTION
`20. This Court has equitable jurisdiction under 10 Del. C. § 341
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`because Plaintiffs seek equitable relief barring JUUL from effecting a conversion of
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`the Notes.
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`21. This Court has subject matter jurisdiction under 8 Del. C.
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`§ 111(a)(2), because this is an action to interpret, apply, and enforce provisions of
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`the Note Purchase Agreement, an agreement by which JUUL, a Delaware
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`corporation, created and sold rights respecting its stock. The Note Purchase
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`Agreement, a true and correct copy of which is attached hereto as Exhibit A, is
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`governed by Delaware law. Section 9.3 of the Note Purchase Agreement provides
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`that it “shall be governed in all respects by the internal laws of the State of Delaware,
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`without regard to conflicts of law.”
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`22. This Court has personal jurisdiction over JUUL because it is a
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`Delaware corporation.
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`THE PARTIES AND RELEVANT NON-PARTIES
`23. Plaintiffs D1 Jasper Holdings LP, D1 SPV JL Master LP, Jay
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`Blocker Ltd, Jay Domestic LLC, GCCU II LLC, TOCU XX LLC, and OC II FIE
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`VIII LP are investment funds that hold Notes issued by JUUL in 2019 and 2020,
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`which are governed by the Note Purchase Agreement. In aggregate, Plaintiffs hold
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`approximately 50.2% of the more than $1.9 billion in outstanding Notes.
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`24. Defendant JUUL is a Delaware corporation headquartered in
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`Washington, D.C. that manufactures, markets, and sells e-cigarettes.
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`25. Non-party Insider Nicholas J. Pritzker is a JUUL director.
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`Pritzker is a member of the wealthy Pritzker family that owned chewing-tobacco
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`giant Conwood before selling it to Reynolds American. Pritzker has been a director
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`of the Company since 2017.
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`26. Non-party Insider Riaz Valani is a JUUL director. Valani was
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`JUUL’s very first investor.
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`27. Non-party Insider James Monsees is a co-founder of JUUL, and
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`was a JUUL director until March 2020.
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`28. Non-party Insider Adam Bowen is a co-founder of JUUL, and
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`was a JUUL director until at least May 2023.
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`29. Bowen, Monsees, Pritzker, and Valani each have substantial
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`equity holdings in the Company. Bowen, Pritzker, and Valani are or at all materials
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`time