18 Broomfield Ride
Oxshott
Surrey
KT22 0LW
PRIVATE AND CONFIDENTIAL
The Board of Directors 3rd October 1995
October 1995
Management Technologies Inc.
335 Madison Avenue
New York
NY 10017 BY FAX
Gentlemen
I am writing to confirm my resignation from the Board of
Management Technologies Incorporated (``MTi') as its President
with effect from Tuesday 25th September 1995. I also give
notice of my resignation from office and subsidiaries of MTI.
Please confirm that these resignations are accepted and that
appropriate notifications have been made. I confirm that I was
forced to resign by reason of the conduct of the Board of
Directors and actions of the Board incompatible with my
membership of it and its fiduciary duties to shareholders. I do
not consider that the Board has acted collectively in accordance
with its fiduciary responsibilities to shareholders and others.
By was of example, I would remind you of the memorandum from
Claudio Guazzoni to the Board on 26th July 1995, a copy of which
is enclosed. Mr. Guazzoni had apparently obtained emergency
funding in the sum of US$300,000.00 for MTI from one source and
meetings had been arranged with three other separate funding
sources. Mr. Guazzoni complains that Mr. Svennilson, Mr. Sladden
and other directors were unavailable for that Board meeting which
put the proposed investment in jeopardy. Mr. Guazzoni alleged
that Mr. Svennilson, Mr. Sladden and other directors had
purposely not acted in the best interests of shareholders by
violating their fiduciary obligations to shareholders. The Board
has taken no action as a result of this memorandum from Mr.
Guazzoni notwithstanding a number of requests by me. The funding
which Mr. Svennilson has undertaken to provide has not
materialised. Given the present financial circumstances of the
Company, I find it inexplicable that no action has been taken.
A second example relates to the proposed appointment of Mr.
Morris as a director of MTI. Mr. Morris has sought to mount a
management but-out of MTI Trading Systems Limited, the company of
which he is Managing Director, at a price which does not
represent the value of that business. The management buy-out
offer was unsolicited and, in my judgment, the appointment of Mr.
Morris to the Board would give rise to a clear conflict of
interest on his part. I find it impossible to believe that such
appointment was and was believed to be in the interest of
shareholders.
I expect outstanding sums due to me under my contract to be met.
These are as follows:
1. a bonus outstanding amounting to 21,000 British pounds in
respect of Winter Partners' performance for the period
ending 30th September 1995;
2. a payment of US$100,000 admitted to be true and acknowledged
to be so in Form 10k file with the SEC;
3. payment in respect of the outstanding 43 days' holiday;
4. payment in respect of the outstanding period of my contract
from 26th September 1995 until 31st May 1997 at the rate
of 155,000 British pounds per annum, i.e. 258,333 British
pounds;
5. Car allowance at the rate of 1200 British pounds per month
for the period until 31st May 1997, i.e. 24,000
British pounds.
Kindly confirm that these payments will be made to me within 14
days of the date of this letter, failing which I shall take
whatever action is appropriate to recover the same.
Yours faithfully
/s/ Keith Williams
KEITH WILLIAMS
Zanett Capital Inc. 1339 COOPER STATION, N EW
-------------------------------------------------------------- --
YORK, NY 10279
----------------
TELEPHONE: 212-343-
2000
FACSIMILE: 212-
343-2121
CLAUDIO GUAZZONI
PRESIDENT
TO: BOARD OF DIRECTORS OF MTI
AS A MATTER OF RECORD
OF 25 JULY 1995
1. As a Director, I requested an emergency meeting for
Wednesday, July 28, 1995 at 8:00 a.m. based upon obtaining
approval for the terms of emergency funding in the sum of
$300,000 for the Company from one source.
2. Furthermore, on the agenda there was to be discussion of
meetings to be held with three separate funding sources,
each of whom can supply the full $3 million we so
desperately need. We have been presented with a Consulting
Agreement from Mr. Belwal, a gatekeeper to a number of
funding sources. We, as a Board, need to approve Mr.
Belwal's non-exclusive Consulting Agreement in order to
proceed with the meetings. If we do not like the terms of
the funding obtained by Mr. Belwal, we need not accept his
money. He gets paid only if and only when we accept his
funding.
3. Mr. Williams authorised the signing of the Notice of today's
meting and was aware of the time and urgency of the meeting.
4. Mr. Cataldo and myself, as Directors, separately contacted
Mr. Svennilson and advised him of the meeting with ample
time. Mr. Svennilson said he was raising funding himself,
and that he absolutely did not approve of management's
signing the contract with Mr. Belwal, thereby excluding
other sources of funding besides himself.
5. Both myself, Mr. Cataldo, and corporate counsel were
available for the meeting which was not held as a result of
not having a quorum and the apparent unavailability of Mr.
Svennilson, Mr. Sladden, and other Directors.
6. As there are material matters of great urgency facing the
Company and a result of the delay in having the meeting, the
$300,000 Investment is already in Jeopardy. It is my
position Mr. Svennilson, Mr. Sladden, and other Directors
have purposefully not acted in the best interests of all
shareholders, violating their fiduciary obligation to
shareholders.
7. In the event the funding is not raised on favorable terms, I
intend to hold Mr. Svennilson, Mr. Sladden and other
Directors personally responsible for any loss to
shareholders of the Company.
8. I had meetings scheduled with two fund managers on Tuesday,
July 25th. Because Mr. Svennilson refused to approve the
signature of the Consulting Agreement, Mr. Belwal postponed
the meetings until today. Upon further stubbornness and
greed from Mr. Svennilson to hoard the financing all to
himself, even today's meetings were canceled.
9. I await your immediate response, at the meeting scheduled
for tomorrow should be productive meeting in the interest
of shareholders and the Company, and not a disruptive non-
productive meeting which will further damage shareholders.
10. Mr. Svennilson has done this Company and its shareholders a
great disservice in trying to hoard the financing and the
associated fees and discounts all to himself.
11. Mr. Svennilson, as Chairman, has not acted in the best
interest of all shareholders and I demand, as a Director, a
full accounting from him.