SETTLEMENT AGREEMENT BETWEEN THE REGISTRANT,
DIVERSIFIED, AND THE TRUSTEE WITH MEMORANDUM OF
AGREED-UPON MODIFICATIONS AND AMENDMENTS
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is made and entered
into by and among Equity Growth Systems, Inc. a publicly held
Delaware corporation ("Equity Growth Systems"); Edward Granville-
Smith, Trustee, a Florida resident (the "Trustee"); and,
Diversified Corporate Consulting Group, L.L.C., a Delaware limited
liability company (Diversified" Equity Growth Systems, the Trustee
and Diversified being collectively referred to as the "Parties" and
each being sometimes hereinafter generically referred to as a
"Party").
PREAMBLE:
WHEREAS, Equity Growth Systems owes Diversified in excess of
$100,000.00 for consulting services, out of pocket costs and
disbursements; and
WHEREAS, Diversified owes the Trustee $30,000.00 in conjunction
with the assumption of a note originally payable by Warren A.
McFadden and secured by 110,000 free trading shares of Equity
Systems common stock, a copy of the current note from Diversified
to the Trustee having been included as an exhibit to Equity Growth
System's Report on Form 10-KSB for the year ended December 31, 1995
(the "Note"); and
WHEREAS, Diversified has an option to purchase 200,000 shares of
Equity Growth Systems' common stock, registered with the Securities
and Exchange Commission on Form S-8 during 1996, a copy of such S-8
being available through the Securities and Exchange Commission's
EDGAR system (the "S-8 Stock"), the exercise price thereof being an
aggregate of $80,000; and
WHEREAS, the Parties are willing to settle all of their outstanding
claims against each other on the terms set forth below:
NOW, THEREFORE, in consideration of the premises, as will as the
mutual covenants hereinafter set forth, the Parties, intending to
be legally bound, hereby agree as follows:
WITNESSETH:
First: Terms of Settlement
Diversified, the Trustee and Equity Growth Systems hereby agree to
settle all of their outstanding claims against each other and their
members, partners, officers, directors, agents and affiliates, on
the following terms:
A. In full payment of the option exercise price for the S-8 Stock,
Diversified hereby cancels the debt owed by Equity Growth Systems,
Inc. as of December 31, 1997, as evinced by the statement from
Diversified to Equity Growth Systems annexed hereto and made a part
hereof as exhibit 1-A.
B. In full payment of the Note, Diversified hereby assigns to the
Trustee the 110,000 shares of stock purchased from Warren A.
McFadden.
Second: Mutual Releases
In consideration for the exchange of covenants reflected above but
excepting only the obligations created by this agreement, the
Parties hereby each release, discharge and forgive the other, and
each of the others' members, officers, directors, partners, agents
and employees from any and all liabilities, whether current or
inchoate, from the beginning of time until the date of this
Agreement.
Third: Miscellaneous
3.1 Amendment.
No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is evinced by a written
instrument, subscribed by the Party against which such
modification, waiver, amendment, discharge or change is sought.
3.2 Notice.
All notices, demands or other communications given hereunder shall
be in writing and shall be deemed to have duly given on the first
business day after mailing by United States registered or unaudited
mail, return receipt requested, postage prepaid, addressed as
follows:
To Equity Growth Systems:
3821 B Tamiami Trail, Suite 201; Port Charlotte, Florida 33949
Attention: Edward Granville-Smith.
To the Trustees:
Edward Granville-Smith.
3821 B Tamiami Trail, Suite 201; Port Charlotte, Florida 33949
To Diversified:
1941 Southeast 51 at Terrace, Ocala, Florida 34471
Attention: William A. Calvo, III.
Or such other address or to such other person as any Party shall
designate to the other for such purpose in the manner hereinafter
set forth.
3.3 Merger.
This instrument, together with the instruments referred to herein,
contains all of the understandings and agreements of the Parties
with respect to the subject matter discussed herein. All prior
agreements whether written or oral are merged herein and shall be
of no force or effect.
3.4 Survival.
The several representations, warranties and covenants of the
Parties contained herein shall survive the execution hereof and
shall be effective regardless of any investigation that may have
been made or may be made by or on behalf of any Party.
3.5 Severability.
If any provision or any portion of any provision of this agreement,
other than one of the conditions precedent or subsequent, or the
application of such provision or any portion thereof to any person
or circumstance shall be held invalid or unenforceable, the
remaining portions of such provisions and the remaining provisions
of this Agreement or the application of such provision or portion
of such provision as is held invalid or unenforceable to persons or
circumstances other than those to which it is held invalid or
unenforceable, shall not be affected thereby.
3.6 Governing Law.
This Agreement shall be construed in accordance with the laws of
the State of New York and any proceedings pertaining directly or
indirectly to the rights or obligations of the Parties hereunder
shall, to the extent legally permitted, be in Greene County, New
York.
3.7 Indemnifications.
Each Party hereby irrevocably agrees to indemnify and hold the
other Parties harmless from any and all liabilities and damages
(including legal or other expenses incidental thereto), contingent,
current, or inchoate to which they or any one of them may become
subject as a direct, indirect or incidental consequence of any
action by the indemnifying Party or as a consequence of the failure
of the indemnifying Party to act, whether pursuant to requirements
of this Agreement or otherwise; provided that, such claims are
asserted by third parties unrelated to the Parties. In the event
it becomes necessary to enforce this indemnity through an attorney,
with or without litigation, the successful Party shall be entitled
to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' throughout any negotiations, trials
or appeals, whether or not any suit is instituted.
3.8 Litigation.
In any action between the Parties to enforce any of the terms of
this Agreement or any other matter arising from this Agreement, the
prevailing Party shall be entitled to recover its costs and
expenses, including reasonable attorneys' fees up to and including
all negotiations, trials and appeals, whether or not litigation is
initiated.
3.9 Benefit of Agreement.
The terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the Parties, their successors, assign,
personal representatives, estate, heirs and legatees.
3.10 Captions.
The captions in this Agreement are for convenience and reference
only and in no way define, describe, extend or limit the scope of
this Agreement or the intent of any provisions hereof.
3.11 Number and Gender.
All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the
identity of the Party or Parties, or their personal
representatives, successors, and assigns may require.
3.12 Further Assurances.
The Parties agree to do , execute, acknowledge and deliver or cause
to be done, executed, acknowledged or delivered and to perform all
such acts and deliver all such deeds, assignments, transfers,
conveyances, powers or attorney, assurances, stock certificates and
other documents, as may, from time to time, be required herein to
effect the intent and purpose of this Agreement.
3.13 Status.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-
lessee relationship, or principal-agent relationship, rather, the
relationships established hereby are those of settling debtor and
creditor.
3.14 Counterparts.
This Agreement may be executed in any number of counterparts. All
executed counterparts shall constitute one Agreement
notwithstanding that all signatories are not signatories to the
original or the same counterpart. Execution by exchange of
facsimile transmission shall be deemed legally sufficient to bind
the signatory; however, the Parties shall, for aesthetic purposes,
prepare a fully executed original version of this Agreement, which
shall be the document filed with the Securities and Exchange
Commission.
3.15 License.
This Agreement is the property of Diversified. The use hereof by
the Parties is authorized hereby solely for purposes of this
transaction and, the use of this form ofagreement or of any
derivation thereof without Diversified's P.C.'s prior written
permission is prohibited.
* * * *
IN WITNESS WHEREOF, the Parties have caused the Agreement to be
executed effective as of the 29th day of April, 1997.
Signed, sealed and delivered
In Our Presence:
____________________________ Equity Growth Systems, Inc.
By:_______________________
____________________________ Edward Granville-Smith, CEO
(CORPORATE SEAL.)
____________________________
___________________________
____________________________ EdwardGranville-Smith,
Trustee
Diversified Corporate Consulting Group,
L.L.C.
___________________________
___________________________ By:_______________________________
William A. Calvo, III, Managing
Member