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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. SUPERIOR COURT DEPARTMENT
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OF THE TRIAL COURT
CIVIL ACTION NUMBER:
“AISACNOO?7YY
CHARLES M. SABA,
ARTHUR P. NAPOLITANO, JR.
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DEFENDANTS
And,
BEWELL ORGANIC MEDICINE INC.,
NOMINAL DEFENDANT
VERIFIED COMPLAINT FOR EQUITABLE RELIEF AND JURY DEMAND
Plaintiffs, Charles M. Saba (“Mr. Saba”) and Arthur Napolitano, Jr. (“Mr. Napolitano),
by and through counsel, respectfully submit this Verified Complaint for Equitable Relief and
Demand for a Jury Trial. This action arises out of the unlawful conduct of a number of Board of
Directors who are part of a closely held corporation named BeWell Organic Medicine, Inc. (the
“Company”). The Company owns and operates a licensed cannabis cultivation operation in
Lowell, Massachusetts and a medical cannabis dispensary. business in Merrimac, Massachusetts.
Plaintiffs Saba and Napolitano assert both direct and derivative claims.
Pursuant to M.G.L. c. 156D, § 7.42, this action is being filed prior to the expiration of the
waiting period because irreparable injury to the corporation would result by waiting for the
expiration of the relevant period.
For the reasons, more fully enumerated below, the Company, Messrs, Saba and
Napolitano have suffered and continues to suffer irreparable harm due to the Defendants’
actions, Accordingly, this Court should issue injunctive relief to prevent future irreparable harm
while this action is pending.
INTRODUCTION
1. The Company is a closely held Massachusetts corporation with a principal place of
business in Lowell, Massachusetts.
2. Plaintiff Mr. Saba, is a co-Founder and CEO of the Company.
3. Plaintiff Mr. Napolitano, is a co-Founder and Treasurer of the Company.
4. Messrs. Saba and Napolitano are also Directors of the Company minority shareholders.
5. This is an action against Defendants, Anthony R. Banks (“Banks”), Paul L. Hearn
(“Hearn”), George Zalucki (“Zalucki”), A Phab Investments, Ltd (“A Phab”), and ARB
(Scotland) Investments, Ltd. (“ARB”).
6. The Defendants engaged in brazen self-dealing and breached their fiduciary duty to the
Company, its minority shareholders and leveraged the untimely demise of the Company’s two
prior attorneys to further engage in numerous violations of shareholder votes, shareholder
agreements, the parties’ Memorandum of Understanding, as well as many of the standard
requirements set forth in Chapter 156D of the Massachusetts General Laws.
7. The Defendants conduct includes, but is not limited, to the purported appointment of a
renegade board of directors and taking illegal actions on behalf of the Company as an improperly
constituted board in derogation of their fiduciary responsibilities.
8. The Defendant breached the covenant of good faith and fair dealing, by among other
things, wrongfully terminating the employment of Mr. Saba.
9. The Defendants also used an alleged voting deadlock to engage in self-serving
behavior in order to increase their operational and financial control over the company by
mischaracterizing their investments as “loans” as opposed to.investments of equity which would
more accurately describe the true nature of their investment.
10. The Defendants further engaged in conduct that prioritized their personal pecuniary
interests as purported lenders to gain priority secured interest over other investors and
shareholders in breach of their duties as fiduciaries.
11. In sum, the Defendants illegally (1) altered the composition of the Board of Directors,
(2) created new Bylaws, (3) fired Mr. Saba from his position as CEO, and (4) engaged in a
number of additional actions for which they had no legal authority and in breach of a
Memorandum of Understanding executed by Messrs. Hearn and Banks that required “Day to day
operational decisions be made by the Founders.”
PARTIES
12. Mr. Saba is an individual who resides in New Hampshire.
12. Mr. Napolitano is an individual who resides in New Hampshire
13, Defendant Banks is an individual who resides in Perth, Scotland.
14, Defendant Hearn is an individual who resides in Derby, England.
15. Upon information and belief, Zalucki is an individual who resides in Tennessee.
16. Defendant A Phab Investments, Ltd. is a foreign private limited company with a
principal place of business in Derby, England. Mr. Hearn is a director of A Phab.
17. Defendant ARB (Scotland) Investments, Ltd. is a foreign private limited company
with a principal place of business in Perth. Scotland. Mr. Banks is a director of ARB.
JURISDICTION AND VENUE
18. This Court has subject matter jurisdiction pursuant to G.L. c. 212, § 4.
19. This Court has personal jurisdiction over the Defendants pursuant to G.L. c. 223A§ 4
because the allegations in this Complaint arise from the Defendants’ transacting business in
Massachusetts, agreements that were executed in Massachusetts, and the agreements are
governed by Massachusetts law.
20. Venue in proper in proper pursuant to G.L. 223, § 8(4).
RELEVANT FACTS
A Pattern of Improper Conduct
21. Defendants Banks and Hearn are Directors of the Company and as such owe the
company a fiduciary duty.
22. Defendants Banks and Hearn have engaged in a pattern of conduct meant to further
their personal interests over that of the corporation.
23. Defendants Banks and Hearn further refused to honor their agreement to dilute their
shares in order to raise funds on for the Company’s growth and expansion plans pursuant to a
business plan upon which they had agreed.
24. Defendants Banks and Hearn demanded to purchase shares at a’preferred price that
was less than the market worth of the shares and otherwise sought to interfere with the voting
rights of shareholders owning the same class of stock.
25. Defendants Banks and Hearn negotiated for their own pecuniary interest and against
the interest of the Company and other shareholders.
26. Defendants Bank and Hearn refused to allow the Company to borrow funds from an
institutional lender at a more favorable rate in order to pay certain notes from the Company to
George and Eloise Zalucki and insisted that the security interest granted in those notes not be
perfected so as not to encumber certain real estate or otherwise diminish equity in certain
property, which Bank and Hearn sought to use for their own pecuniary gain.
27. Defendants Banks and Hearn expressed dismay and refused to recognize certain
voting rights of minority shareholders until leveraging those voting rights when it advanced their
self-interest and efforts to wrestle control of the Company from Messrs. Saba and Napolitano.
28. Defendants Banks and Hearn intentionally interfered with an advantageous
investment opportunity that would have provided additional capital investment from a group of
contractors led by Gary Thomas and Northpoint Construction.
29. Defendant Hearn has stated that investing in the company was risky and that asking
someone to lend money to the company would be crazy.
30. In a recorded board meeting, Defendant Banks admitted how he intended to destroy
the equity of the company if his self-serving demands were not met.
31. More specifically, in a Zoom Meeting Recording on May 21, 2020, Defendant Banks
stated, to Mr. Napolitano, “so the going gets tough you want to fuck off. If we sell now, your
sister and the Zalucki’s will be the only losers here. I will see we get fuck all for this business I
really will” (emphasis added).
32. In response to the above-statement, Defendant Hearn responded to Defendant Banks,
“don’t threaten” and Banks responded, “I am threatening” (emphasis added).
33. Defendants Hearn and Banks have little knowledge and no experience regarding
Massachusetts’ highly regulated cannabis industry.
34, Unlike Messrs. Saba and Napolitano, Defendants Hearn and Banks have little or no
knowledge of (1) the Company’s cannabis products; (2) how the Company’s cannabis products
are cultivated/produced/packaged/marketed; (3) cannabis market conditions, for either medical
or adult use; (4) the regulatory compliance climate, (5) what core efforts need to be undertaken
to design and maintain a cultivation center and/or medical dispensary facility, (6) what security
requirements are required, (7) the operational requirements of the Company’s complex HVAC,
water treatment system and irrigation system.
35. In sum, there is no basis under which Defendants Hearn and Banks should be given
operational control of the Company.
36. George Zalucki is a co-conspirator with Defendants Hearn and Banks.
The March 15, 2021 Joint Consent of Shareholders
37. On or about March 15, 2021, Defendants Hearn and Banks provided to the
Company’s corporate counsel a purported a Joint Consent in lieu of a meeting as well as a Notice
of Special Meeting of Shareholders, each concerning the election of directors of the Company.
The Notice was unsigned.
38. The Joint Consent also improperly references a simple majority requirement for
shareholder votes versus a previous corporate vote signed by Messrs. Hearns, Banks, Saba and
Napolitano requiring a super-majority (75%) shareholder vote on “all decisions of the
Company.” A true and accurate copy of which is attached as Exhibit A.
39. These deficiencies were called out in email correspondence from John Colucci, Esq,
of McLane Middleton (attorney for the Company) to Howard Cooper, Esq. (personal attorney for
Defendants Hearn/Banks). See Exhibit B, a true and accurate copy of which is attached.
40. Immediately after that email correspondence, Attorney Colucci resigned as attorney
for the Company, for among other things, Defendants’ refusal to abide by his advice on this
issue. See Exhibit C, a true and accurate copy of which is attached.
41. Following Attorney Colucci resignation, Defendant Banks sent an email to the
shareholders with an unsigned Notice of Special Meeting and Joint Consent. A true and accurate
copy of which is attached as Exhibit D.
42, Upon information and belief, Defendant Banks has made promises on behalf of the
Company to certain shareholders of the Company in exchange for their votes.
43, Upon the resignation of Attorney Colucci, Attorney Gary Bubb of Roberto Israel &
Weiner, P.C., was engaged as corporate counsel for the Company, the Company’s fourth since
its inception and in the last two years.
44, Attorney Bubb again informed Hearn/Bank, via their attorneys at Todd & Weld that
the purposed shareholder consent vote was illegal. A true and accurate copy of which is attached
as Exhibit E.
45, As a basis for his determination, Attorney Bubb relied on the Memorandum of
Understanding (“the MOU”) signed by Banks/Hearn dated April 30, 2018, that established the
75% super-majority vote requirement -- which was not followed.
46. The MOU is considered a valid shareholder agreement under Section 7.32 of M.G.L.
Chapter 156D.
47, The MOU super-majority, voting requirement was further confirmed by a May 21,
2019 “Corporate Vote of the Company Organic Medicine, Inc.” A true and accurate copy of
which is attached as Exhibit F.
48. Following the March 16, 2021, purported shareholder consent vote, in which less than
a super-majority of shareholders voted in favor, Defendants Banks and Hearn next attempted to
leverage that vote to change the composition of the Board of Directors, and reduce the number of
directors from eight to five, consisting of Defendants Hearn, Banks, Zalucki, Saba and
Napolitano, effectively executing a coup and giving Hearn and Banks apparent control of the
Board and the Company.
49. The Articles of Entity Conversion established, and numerous filings with the
Secretary of the Commonwealth and Cannabis Control Commission (“CCC”), confirm that the
Company has eight company directors, not five.
50. The names of the actual directors are: Charles M. Saba, Arthur P. Napolitano, Jr.,
Robyn A. Saba, Anthony R. Banks, Jean Tabit D.O., Ronald D’Arcangelo, Paul L. Hearn,
Charles J. Saba. (“The Legal Board of Directors”)
51. Upon information and belief, on March 16, 2021, Defendants purported to change the
composition of board of directors from eight individuals to five individuals, including Banks,
Hearn and Zalucki (the “Renegade Board of Directors”).
52, In addition to the improper notice, the 75% shareholder super-majority requirement
was not met when certain shareholders illegally voted to change the compensation of the Board
of Directors and the election of Mr. Zalucki to the Board was improper.
The March 26, 2021 Meeting
53. The Renegade Directors subsequently and improperly noticed a meeting of the board
of directors for March 26, 2021, failing to provide proper notice to the actual Legal Board of
Directors consisting of eight members. A true and accurate copy of which is attached as Exhibit
G
54, The meeting was improperly noticed because it was not sent to The Legal Board of
Directors and thus a quorum of directors was not present for the meeting.
55. Therefore, any actions taken at the Renegade Board meeting are illegal and void ab
initio.
56. Mr. Zalucki would subsequently report that he attended the meeting of the renegade
directors under protest and based on assurances by Todd & Weld that the shareholder meeting
appointing him as director was legally valid.
57. At that meeting, the Co-Conspirators engaged in a number of unauthorized actions
such as removing Mr. Saba from his position as CEO, hiring an interim CEO, and enacting new
bylaws.
A Forged Notice of Meeting
58. Robyn A. Saba serves as the secretary of the Company Organic Medicine, Inc.
59. On February 11, 2021, a Notice of Special Shareholder Meeting was sent out that
purported to be signed by Robyn Saba.
60. Robyn Saba did not sign or authorized her signature to be affixed to the Notice of
February 11, 2021, Special Meeting.
61. Upon information and belief, Defendant Anthony Banks and/or Defendant Paul
Hearn may have signed Robyn Saba’s name to the February 11, 2021, Notice of Special
Meeting.
62. Among the Agenda items listed in the Notice prepared by or on behalf of
Hearn/Banks are votes to remove Mr. Saba as CEO and to remove Mr. Saba from the Company’s
Board of Directors. See Notice of February 11, 2021, Special Meeting, a copy of which is
attached as Exhibit H.
63. Prior to the meeting, Mr. Hearn and Banks published to the shareholders, but not
Messrs. Saba and Napolitano, a litany of demonstrably false, fraudulent and otherwise
derogatory statements concerning the performance of Mr. Saba as CEO and Messrs. Saba and
Napolitano as directors of the Company.
64. That litany of false, fraudulent and otherwise derogatory statements was repeated by
Messrs. Bank and Hearn during the special shareholder meeting.
65. The Company’s shareholders have no authority, statutory or otherwise to remove Mr.
Saba as CEO of the Company. Notwithstanding the foregoing and the advice to that effect of the
Company’s then corporate counsel, the meeting and the vote proceeded.
66. Despite Hearn/Banks efforts at this juncture, following a vote of the shareholders,
Mr. Saba was retained as CEO and remains a member of the board of directors.
67. However, significant damage was done to Mr. Saba’s professional reputation and his
and Mr. Napolitano’s ability to lead the Company was severely impaired by the false accusation
of incompetence and fraud made by Hearns/Banks.
68. As indicated in the preceding paragraphs, the Hearn/Banks campaign against Messrs.
Saba and Napolitano did not end with the shareholder vote to keep Mr. Saba in his position as
CEO.
COUNT I~ BREACH OF FIDUCIARY DUTY AND GOOD FAITH DEALING
Plaintiff Derivatively vs. All Defendants
69. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth therein.
70. Plaintiffs were Shareholders of the Company at the time of the alleged misconduct.
71. Plaintiffs continues to be Shareholders of the Company and meets the requirements of
M.GLL. c. 156D, § 7.41.
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72. Plaintiffs have previously filed a written demand that the Company pursue the claim
and meets the requirements of G.L. c. 156D, § 7.42. A true and accurate copy of which is
attached as Exhibit I.
73. Plaintiffs are bringing this suit prior to the expiration of the waiting period because
irreparable injury would result by waiting for the period to expire.
74. By reason of their positions as officers, directors, shareholders, and/or fiduciaries of
the Company, and because of their ability to control the corporate affairs of the Company, the
Defendants owed the Company fiduciary obligations of trust, loyalty, and utmost good faith, and
were required to control and manage the Company in the best interest of the Company and its
shareholders so as to benefit all shareholders equally and not in furtherance of their personal
interests.
75. At all times relevant, as described above, the Defendants breached the fiduciary
duties, including the duty of loyalty they owed to the Company and did not act with the degree of
diligence, care and skill which ordinarily prudent men would exercise under similar
circumstances in like positions.
COUNT I —- BREACH OF FIDUCIARY DUTY AND GOOD FAITH DEALING
Plaintiffs Directly vs. All Defendants
76. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth therein.
77, By reason of their positions as officers, directors, shareholders, and/or fiduciaries of
the Company, and because of their ability to control the corporate affairs of the Company, the
Defendants owed Mr. Saba a fiduciary obligation of trust, loyalty, and utmost good faith
interests.
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78. Plaintiffs are owed a fiduciary duty because the Company is a closely held
corporation.
79. Here, controlling shareholders, Defendants Banks and Hearn, have proposed and
implemented self-interested transactions to the detriment of a minority shareholders, including
Messrs. Saba and Napolitano.
COUNT 1- MINORITY FREEZEOUT
Plaintiffs Directly vs. Anthony Banks and Paul Hearn
80. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth therein.
81. Through their investment entities, Defendants Anthony Banks and Paul Hearn control
47% of the Company.
82. Charles M. Saba is a minority shareholder who controls 23.5% of the Company.
83. By reason of their positions as officers, directors, shareholders, and/or fiduciaries of
the Company, and because of their ability to control the corporate affairs of the Company,
Defendant Banks and Defendant Hearn owed Plaintiffs a fiduciary obligation of trust, loyalty,
and utmost good faith interests.
84. Defendants Banks and Hearn breached their fiduciary duty to Charles Saba through a
classic minority freezeout.
85. Plaintiffs were frozen out without any legitimate business purpose.
86. There were less onerous alternatives to the actions and conduct of Messrs. Hearn and
Banks.
COUNT IV —- WRONGFUL TERMINATION
Mr. Saba Directly vs. All Defendants
87. The Plaintiff repeats and realleges the foregoing paragraphs as if fully set forth
therein.
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88. The Defendants had no legal authority to fire the Plaintiff and in doing so the
Defendants violated the implied covenant of good faith and fair dealing.
89. The Plaintiff was also fired based on a Board of Directors that was illegally
constituted.
COUNT V —- DEFAMATION
Plaintiffs vs. All Defendants
90. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth
therein.
91. As set forth above, the defendants published various statement verbally and in
writing of and concerning the Plaintiffs
92. Those statements were both defamatory, and false; and either caused economic loss,
or are otherwise actionable without proof of economic loss.
COUNT VI ~ DECLARATORY JUDGMENT
Plaintiffs Derivatively vs. All Defendants
93. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth therein.
94. Plaintiffs were Shareholders of the Company at the time of the alleged misconduct.
95. Plaintiffs continues to be Shareholders of the Company and meet the requirements of
M.GL.c. 156D, § 7.41.
96. Plaintiffs have previously filed a written demand that the Company pursue the claim
and meets the requirements of G.L. c. 156D, § 7.42.
97. Plaintiffs are bringing this suit prior to the expiration of the waiting period because
irreparable injury would result by waiting for the period to expire.
98. Plaintiffs seek a Declaration that:
a) Declares that the recent actions purporting to reduce the number of directors from
8 to 5 and electing George Zalucki as a director are ineffective, null and void ab
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initio because those actions were not authorized by holders of % of the issued and
outstanding common stock of the Company.
b) Declares the designation of George Zalucki as a director of the Company is
invalid and void ab initio.
°) Declares that the director meeting held on March 26 was invalid for the reasons
set forth above, including failure to have a quorum (only 2 of the 8 directors
attended the meeting), and as a result none of the actions taken at that meeting are
effective.
d) Instructs Defendants Zalucki, Hearn, Banks and interim CEO Vaule that neither
they or their agents or counsel should have any contact, in writing or otherwise
with the Cannabis Control Commission.
e) Removes Defendants Zalucki, Hearn, and Banks as members of the Company’s
Board of Directors.
Ratifies the engagement of Attorney Gary Bubb and the firm of Ruberto, Israel &
Weiner, P.C. as counsel for the Company.
COUNT VII. — INJUNCTIVE RELIEF
Plaintiffs Derivatively vs. All Defendants
99. The Plaintiffs repeat and reallege the foregoing paragraphs as if fully set forth therein.
100. Plaintiffs were Shareholders of the Company at the time of the alleged misconduct.
101. Plaintiffs continue to be Shareholders of the Company and meet the requirements of
M.G.L. c. 156D, § 7.41.
102. Plaintiffs have previously filed a written demand that the Company pursue the claim
and meets the requirements of G.L. c. 156D, § 7.42.
103. Plaintiffs are bringing this suit prior to the expiration of the waiting period because
irreparable injury would result by waiting for the period to expire.
104. The Company has and will continue to suffer irreparable harm in the absence of
injunctive relief.
105. Defendants will suffer no cognizable harm if an injunction is granted that can
outweigh the harm to the Company from the lack of an injunction.
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106. Plaintiffs requests that this Honorable Court issue an injunction ceasing all Board
Meetings, Joint Shareholder Consents, or Shareholder Votes during the pendency of this action.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs request that the Court grant the following relief:
1) Issue Injunctive Relief;
2) Issue a Declaratory Judgment;
3) Enter judgment in favor of the Plaintiffs on all counts of this Complaint;
4) Issue the Plaintiffs a damages award on each of the above counts in an amount to be
determined at trial; and
5) Grant Plaintiffs such other further relief as the Court deems just and proper.
JURY CLAIM
Plaintiffs demand a jury on all counts and issues so triable.
SIGNATURE PAGE FOLLOWS
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PLAINTIFF
CHARLES M. SABA
ARTHUR P. NAPOLITANO
By their attorneys,
Paul Muniz (BBO# 564786)
pmuniz@donovanhatem.com
Sarandos Markopoulos (BBO# 693835)
smarkopoulos@donovanhatem.com
DONOVAN HATEM, LLP
53 State Street, 8" fir.
Boston, Massachusetts 02109
(t) (617) 406-4500
(8 (617) 406-4501
Dated: March 30, 2021
VERIFICATION
I, the undersigned, hereby verify the foregoing recitation of facts, other than the
allegations made on information and belief, are true based on my personal knowledge, and on the
documents I have reviewed for purpose of preparing this Complaint and Jury Demand
Signed under the penalties of perjury this 30th day o:
/s/
Charles Saba
4832-4582-8067, v. 3
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March 15, 2021
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF BEWELL ORGANIC MEDICINE; INC.
Dear Shareholder,
NOTICE IS HEREBY GIVEN to all shareholders of BeWell Organic Medicine, Inc. (“BeWell”
or the “Company”) that, pursuant to Sections 7.02, 7.05 and 7.08 of Chapter 156D of the
Massachusetts General Laws, Directors Paul L. Hearn and Anthony R. Banks, who collectively
own forty-seven (47) percent of the shares of the Company, have called a special meeting of
shareholders on March 22, 2021, at 9:00 AM EST via Zoom for the purpose of transacting the
following business:
1. The election of the Board of Directors for the Company.
Sincerely,
Robyn A. Saba
Secretary, BeWell Organic Medicine, Inc.
JOINT CONSENT OF THE SHAREHOLDERS OF
BEWELL ORGANIC MEDICINE, INC.
The undersigned, being a majority of the Shareholders of BeWell Organic Medicine, Inc.,
a Massachusetts corporation, (the “Corporation”), in lieu of a meeting, hereby adopt the
following resolutions with the same force and effect as if such resolutions are adopted at a
meeting of the Shareholders of the Corporation pursuant to Chapter 156D, Sections 7.04,
effective March 22, 2021:
RESOLVED: That the Company is authorized to issue one hundred (100) shares of
common stock of which all one hundred (100) are currently issued and
outstanding and held as follows:
Shareholder Shares
Charles M. Saba 23.5
Arthur P. Napolitano, Jr. 23.5
A PHAB, LTD. 23.5
ARB (SCOTLAND), LTD. 23.5
George Zalucki 2
Eloise Zalucki
Kevin and Robin Close
Charles J. Saba
RESOLVED: That the following individuals are hereby elected to serve as the sole
Directors of the Corporation, to hold such position until their
successors are duly elected and qualified:
Charles M. Saba
Arthur P. Napolitano, Jr.
Anthony R. Banks
Paul L. Hearn
George Zalucki
RESOLVED: That this written consent shall be filed with the records of the Corporation,
and any action set ‘forth herein shall be treated for all purposes as an action
duly taken at a meeting of the Shareholders.
RESOLVED: That this Consent may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one
and the same instrument.
[Signature pages to follow.]
-2-
IN WITNESS WHEREOF. the undersigned bas duly executed this Written Consent as of the date
first set forth above
SHAREHOLDERS
Dated: +2021
Charles M. Saba
Dated: 2021
Arthur P. Napolitano, Jr.
Dated: tel Macess 200
ARB (SCOTLAND), LTD.
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From: Colucci, John
Sent: Monday, March 15, 2021 4:44 PM
To: Cooper, Howard ; Cacace, Joseph
Ce: ‘Joel Sowalsky' ; Paul Muniz
Subject: RE: beWell Consent & Notice of Meeting [MCLANE-DB.FID1 869372]
Howard
It is accurate that the shareholders can act by written consent and that the action is
effective upon 7 days’ notice. That said, the email below references an action by the
majority; I call your attention to the attached consent that purports to impose a super-
majority shareholder vote requirement “for all decisions of the Company” (paragraph
(h)). Yet another point of dispute regarding governance.
Thave tried to remain as corporate counsel, despite the fact that there are no bylaws,
multiple conflicting votes on governance, and a dispute over the identity of the board
members, in order to try to assist the parties to adopt a mutually agreed upon set of
governance documents that would allow the Company to move forward. No one was less
happy than I was that the settlement talks collapsed.
The disputes are now centering on those very governance issues, and it is increasingly
unclear who is in a position to give me direction on behalf of the Company. The Board
(if Paul, Tony, Art and Chuck constitute the Board) are deadlocked. I believe Mr. Saba
and Mr. Napolitano believe others listed at the Secretary of State constitute the Board.
At this point, if the shareholders can’t agree on the identity of the board members, how
shareholder votes are to be taken, or even a set of bylaws, my representation has become
untenable.
T have no choice, at this point, but to withdraw as corporate counsel. I would be happy to
represent the Company in the future if the governance issues are resolved, but I
understand the Company might want a different attorney at that point.
Tam truly sorry that the parties have been unable to resolve these issues. I am copying
Attorney Muniz so he is aware of my withdrawal and the reasons for it.
Please call if you would like to discuss further.
John D. Colucci, Esq., CPA
From: Colucci, John
Sent: Monday, March 15, 2021 4:48 PM
To: Chuck Saba
Ce: Paul Muniz
Subject: FW: beWell Consent & Notice of Meeting [MCLANE-DB.FID1869372]
J am withdrawing as corporate counsel for the reasons set forth below. J am sorry, but at
this point my position is untenable.
Please let me know when the Company selects corporate counsel and I will be happy to
transfer the file and debrief him or her the best that I can.
Scott will be in touch with respect to the answer to be filed tomorrow.
I truly wish you and the Company the best and hope you are able to resolve these issues.
John D. Colucci, Esq., CPA
D
From: Tony Banks
Sent: Tuesday, March 16, 2021 4:10 AM
To: 'Kevin Close’ ; 'Robin Close' ;
‘eloisezalucki@gmail.com' ; 'George Zalucki'
; 'Art Napolitano' ; Chuck Saba
; CJ.Saba
Ce: ‘Paul Hearn (paul.hearn3 @btinternet.com)'
Subject: Election of new Board
All-
Unfortunately, Bewell’s corporate attorney John Colucci has resigned from representing
the company.
In the absence of a corporate attorney, the attached requests and notices were sent to the
company secretary to enact.
Please cast your vote as soon as possible, prior to the meeting, and circulate a copy of
your vote to all shareholders.
Regards
Tony Banks
From: Gary Bubb
Date: March 27, 2021 at 6:48:01 AM EDT
To: tony.banks@balhousiecare.co.uk, paul.hearn3@btinternet.com, "Joseph M. Cacace
(icacace @toddweld.com)" , "Cooper, Howard" ,
Chuck Saba , Art Napolitano
Cc: jean.tabit@gmail.com, darkyi9@comcast.net, cjsaba@pitchmytent.com, robyn@sabaemail.com,
lars@pilotagepartners.com, Bradley Croft , grz717@charter.net, Paul Muniz
, kmcofnh@gmail.com, closecall69@aol.com
Subject: beWell Organic Medicine, Inc.
To shareholders and directors of beWell Organic Medicine, Inc.,
For purposes of this email, “RIW” refers to Ruberto, Israel & Weiner, P.C.” and
“Todd & Weld” refers to Todd & Weld LLP, which represents A Phab Ltd., ARB
(Scotland) Ltd., Paul Hearn and Anthony Banks.
On March 18, 2021 RIW was engaged by Charles M Saba, Charles J Saba and
Arthur. Napolitano, in their capacities as CEO, President and Treasurer,
respectively, of be Well Organic Medicine, Inc. (“beWell”), to act as company
counsel to beWell. The engagement followed a recommendation by John Colucci,
Esq., of McLane Middleton, which had been acting as company counsel to that
point.
The engagement of RIW has been challenged by Todd & Weld. However, the
officers who engaged RIW had both apparent and actual authority to engage RIW
on behalf of beWell, and RIW has accepted the engagement.
RIW was asked to review a recent shareholder consent (attached to this email as
“Consent — Shareholders — March 16, 2021”), a Notice of Special Meeting of Board
of Directors of beWell Organic Medicine, Inc. (attached to this email as “Notice of
Special Meeting of Directors March 26, 2021”), and supporting documentation,
including a “Corporate Vote of beWell Organic Medicine, Inc.” reflecting actions
taken at a shareholder meeting held on May 21, 2019 (attached to this email as
“Consent — Shareholders — May 21, 2019”).
On March 25 RIW sent an email to Todd & Weld containing the following
summary of RIW’s review of the relevant documents:
. The purported shareholder consent vote (attached to this email as
“Consent — Shareholders — March 16, 2021”) is ineffective because it was
not signed by holders of the requisite % of the outstanding shares of
Company common stock. The % requirement was established in the May,
2019 shareholder consent vote (attached as “Consent — Shareholders —
May 21, 2019”). | have not reviewed any documents that modify the %
requirement established by the May 2019 shareholder consent. As a result,
o The implied reduction in the number of directors from 8 to 5 is
ineffective. The designation of 5 individuals as directors of the
Company is also ineffective, but | note that 4 of the designated
directors are current directors of the Company, so there is no
reason to question their status as directors. However, the
designation of George Zalucki as a director of the Company is
ineffective.
A notice of a directors meeting for March 26 has been circulated. A
copy of the notice is attached. The notice is defective because it was
only sent to half of the directors currently in office. Individual
directors can waive the defective notice, but | would note that a
quorum for purposes of the meeting is five directors, and George
Zalucki is not a director and his presence at a director meeting would
not count towards a quorum. Obviously, if there is not a quorum for
the directors meeting, none of the actions proposed in the notice of
meeting can be taken.
e The number of Company directors is 8. This was established by the Articles
of Entity Conversion and has not been increased or decreased by any
subsequent shareholder or director action that | have reviewed. | note that
the current board composition (as set forth in the most recently filed
Company Annual Report) has 4 directors that are not identified as such in
the Articles of Entity Conversion, but | have no reason to question the
circumstances creating vacancies in the board subsequent to the filing of
the Articles of Entity Conversion and the manner in which the vacancies
were filled by the remaining directors. As a result, | have no reason to
challenge the slate of directors identified in the Annual Report most
recently filed by the Company with the Massachusetts Secretary of State.
The noticed directors meeting was held on March 26, and many of the actions
described in the attached Notice of Special Meeting of Directors were taken.
Following the meeting, Anthony Banks circulated emails to beWell shareholders,
employees and other recipients, summarizing the actions taken at the meeting
and causing a significant stir among the recipients.
In its capacity as counsel to beWell, RIW reiterates its view, summarized above,
that recent actions purporting to reduce the number of beWell directors from 8
to 5 and elect George Zalucki as a director are ineffective because they were not
authorized by holders of % of the issued and outstanding common stock of
beWell. Furthermore, the director meeting held on March 26 was invalid for a
variety of reasons, including failure to have a quorum (we understand that only 2
of the 8 beWell directors attended the meeting), and as a result none of the
actions taken at that meeting were effective.
Again, RIW acts solely as company counsel to beWell; RIW does not represent or
advise any of the shareholders, officers or directors of beWell, including without
limitation Charles M. Saba, Arthur Napol