EQUITY GROWTH SYSTEMS, INC.
A publicly held Delaware corporation
MINUTES OF SPECIAL MEETING OF BOARD OF DIRECTORS
A special meeting of the Board of Directors for Equity Growth Systems,
inc. (the "Board" and the "Company," respectively), was held by telephone
conference on March 3, 1999, at 2:00 P.M., after provision of notice to
all members by telephone and facsimile transmission. A copy of such
notice is appended hereto as exhibit "A". All exhibits were provided to
the participants by facsimile transmission.
The following Directors were present at the telephone
conference meeting held on March 3, 1999: Mr. Scimeca, Mr.
Joffe, Ms. Field, Mr. Chamberlin, Mr. Mark Granville- Smith
as attorney in fact for Mr. Edward "Ted" Granville-Smith,
Jr.
The following Directors were absent: None.
The meeting was called for the following purposes:
Also present as a guest for the purposes of a short
presentation to the board was Charles J. Champion on behalf
of Suntel Total Network, Inc.. After Mr. Champion completed
his presentation, Mr. Champion was excused and the Board then
addressed the following business:
1. WHEREAS, it appears that time is of the essence for retaining
an auditor for the purposes of filing a timely 10-KSB for
1998; and
2. WHEREAS, the newly elected corporate management team has reviewed the
relationship of the company and Ted Granville-Smith, Jr., entities
associated with Mr. Granville-Smith, Jr., and Jerry Spellman, including
entities associated with Mr. Spellman; and
3. WHEREAS, Mr. Spellman has represented that he and/or entities he is
associated, have collectively provided at least $130,000 in capital to or
for the direct benefit of Equity Growth Systems under arrangements with
Ted Granville-Smith, Jr., calling for Equity Growth Systems to assure
repayment thereof (the "Spellman Loans"); and
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4. WHEREAS, Ted Granville-Smith, Jr., has represented (himself and through
his attorney in fact) that he and/or entities he is associated, has
provided at least $17,000 in capital to or for the direct benefit of
Equity Growth Systems under arrangements calling for Equity Growth
Systems to assure repayment thereof ; and
5. WHEREAS, Ted Granville-Smith, Jr., and the entities he is
associated, and Spellman and the entities he is associated,
have proposed that the Spellman Loans and the Granville-Smith
Loans be discharged through rescission of the series of
agreements between Granville-Smith, Jr. in a number of
capacities and Equity Growth Systems pursuant to which Equity
Growth Systems acquired rights to a number of real estate
assets, as a result of which, pursuant to agreements between
Granville-Smith, Jr., and Spellman, they would assume all
ownership rights theretofore are vested in Equity Growth
Systems, inc.; and
6. WHEREAS, in light of the complexities involved in the LP Assets, which
only Granville-Smith, Jr. and Spellman understand, disassociation
therefrom in exchange for cancellation of all obligations to the other
Parties, from whatever source, including, without limitation, employment
and consulting agreements, promissory notes, loans, etc., appears to be
in the best interests of the stockholders; and
7. WHEREAS, in the effort to reasonably address the issues involved, Mr.
Spellman has been less than forthright in providing evidences of the
alleged indebtedness of the Company or providing an accounting concerning
the alleged indebtedness, and therefore it appears necessary that a
determination of the amount of indebtedness, if any should be determined
by a Court of Competent Jurisdiction; and
8. WHEREAS, time is of the essence for the purposes of addressing certain
issues concerning the negotiation, execution of the
Spellman/Granville-Smith, Jr. Settlement Recission Agreement and that
possible litigation as to Jerry Spellman and entities or affiliates
associated with Mr. Spellman may be appropriate and necessary; and
9. WHEREAS, certain companies have indicated an interest in negotiating
certain consulting agreements with the company for the purposes of
becoming reporting companies under federal securities laws using the
Company's assistance; and
10. WHEREAS, the company is positioned to provide assistance to
such companies in accomplishing their goals; and
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11. WHEREAS, Atlanta Lending Services, Inc., doing business as Global
Acceptance Corporation has indicated a desire to go public and said
company is interested in discussing with the company various options
concerning a reorganization with the Company.
12. WHEREAS, due to unusual activity in the Companies Securities, the Yankee
Companies, Inc., has recommended to the board, with the concurrence of
General Counsel, that an 8-K be filed immediately discussing the current
status of the Company.
Mr. Chamberlin was elected by the members participating to act as the
Chairman of the meeting and also acted as secretary, and after discussions and
due procedures, the Board (except for Mr. Granville Smith, who was medically
unable to attend) unanimously adopted the following resolutions:
1 RESOLVED, that since time is of the essence, Director Penny Field is
hereby authorized through March 5, 1999 at 10:00 A.M. to negotiate a
reasonable retainer agreement calling for no more than $5,000.00 in total
compensation, with an auditor of choice, for the purposes of preparing
financials suitable for the filing of 10-KSB for 1998. Should Penny Field
be unable to secure an auditor in a timely fashion, Director Charles
Scimeca is directed to negotiate a reasonable retainer agreement for no
more than $5,000.00 in total compensation with Baum & Company, P.A., the
auditors that prepared financials for the 10-KSB for 1996, and 1997. The
negotiated retainer agreement will then be circulated to board members
for the purposes of board approval.
Please Initial:
Mr. Scimeca: ___ Mr. Joffe: ___ Ms. Field: ___, Mr. Granville-Smith:
___ , Mr. Chamberlin: __.
2. RESOLVED; that since time is of the essence, Director Charles
Scimeca in conjunction with the Yankee Companies, Inc. is
hereby authorized to finish negotiation, with content
substantially similar to the content of the consulting
agreements attached hereto and marked as Exhibit, "B, C, D, E
", and subject to reasonable due diligence examination of
each entity, on behalf of the Company, and to enter
consulting agreements with those companies seeking the
services of Equity for the purposes of becoming reporting
companies under federal securities laws wherein; however,
Mr. Scimeca will not finalize any consulting agreement with
any such company wherein he has a personal interest nor will
Yankee negotiate with any company wherein a principal of
Yankee has personal interest. Companies which Mr. Scimeca
and the Yankee shall begin negotiations with are: Jersey
Products, Inc., Suntel Total Network, Inc., companies which
Yankee will negotiate without Mr. Scimeca is Gaff, Inc., ( a
company in which Mr. Scimeca has a conflict of interests,
and companies which Mr. Scimeca will negotiate without Yankee
is Sports Collectibles Exchange, Inc., (In which Mr.
Chamberlin and Mr. Calvo have a conflict of interest). Each
negotiated consulting agreement will be individually approved
by the board.
Please Initial:
Mr. Scimeca: ___ Mr. Joffe: ___ Ms. Field: ___, Mr. Granville-Smith:
___ , Mr. Chamberlin: __.
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3. RESOLVED, that Director Charles Scimeca is hereby authorized
to finalize negotiations and execute on behalf of the company
the Spellman/Granville-Smith Settlement Recission Agreement,
as attached as Exhibit "F". Furthermore, the Company's
General Counsel is instructed to commence litigation seeking
a Declaratory Judgment and Accounting from Jerry Spellman and
entities associated with Mr. Spellman, for the purposes of
determining the indebtedness of the company to such persons,
if any; Mr. Scimeca has until Monday, March 8, 1999 at 5:00
P.M. to finalize negotiations with Mr. Spellman. If finalize
negotiations with Mr. Spellman are not completed by the time
set the General Counsel will commence litigation after giving
board members five days advance written notice of his efforts
to begin service of same on Mr. Spellman and the various
entities he is associated.
Please Initial:
Mr. Scimeca: ___ Mr. Joffe: ___ Ms. Field: ___, Mr. Granville-Smith:
___, Mr. Chamberlin: __.
4. RESOLVED, the Board hereby authorizes the filing of a form 8-K
immediately for the purposes of disclosing the above actions, a copy of
which is attached as Exhibit "G", and the Company's status in order to
avoid any possibility that persons with which the Company is negotiating
are engaging in insider trading.
Please Initial:
Mr. Scimeca: ___ Mr. Joffe: ___ Ms. Field: ___, Mr. Granville-Smith:
___, Mr. Chamberlin: __.
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5. RESOLVED, Mr Chamberlin is authorized to begin negotiations with Atlanta
Lending Services, Inc., doing business as Global Acceptance Corporation
for the purposes of a possible reorganization with the Company.
Please Initial:
Mr. Scimeca: ___ Mr. Joffe: ___ Ms. Field: ___, Mr. Granville-Smith:
___, Mr. Chamberlin: __.
Having adopted the foregoing resolutions, upon motion duly made, seconded
and unanimously adopted, the Board meeting was terminated.
The foregoing, based on our best recollection and notes, constitute the
actions taken at such special meeting of the Board, and by our execution of
these minutes and initials on each page and under each resolution adopted, we do
so confirm, effective as of this 3rd day of March, 1999.
/s/ G. Richard Chamberlin /s/
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G. Richard Chamberlin
Chairman and Secretary of the Meeting
Director
/s/ Charles J. Scimeca /s/
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Charles J. Scimeca
Director
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Anthony Q. Joffe
Director
/s/ Penny Field /s/
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Penny Field
Director
/s/ Mark Granville-Smith/s/
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Mark Granville-Smith, as attorney in fact for Ted
Granville-Smith, Jr.
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