SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
======================================
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
======================================
Date of Report: June 30, 1997
Equity Growth Systems, Inc.
(Exact name of registrant as specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
O-3718
(Commission File Number)
11-2050317
(IRS Employer Identification Number)
3821-B Tamiami Trail, Suite 201; Port Charlotte,
Florida 33952
(Address of Principal Executive offices) (Zip Code)
(941) 255-9852
Registrant's Telephone Number,
including Area Code <PAGE>
ITEM 5. Other Events
The Registrant has entered into a settlement agreement
with Diversified Corporate Consulting Group, L.L.C., a Delaware
limited liability company ("Diversified"), and Edward
Granville-Smith, Trustee (the "Trustee"), pursuant to which:
(1) Diversified exercised its option to acquire
200,000 shares of the registrants common stock
previously registered on Form S-8, in
consideration for cancellation of more than
$100,000 claimed to be owed by the Registrant to
Diversified for services rendered since 1994; and
(2) Diversified's liability to the Trustee for $30,000
under an exchange agreement will be canceled in
consideration for the transfer by Diversified to
the Trustee of 110,000 shares of the Registrants
common stock acquired by Diversified from Mr.
Warren A. McFadden during 1996.
A copy of the settlement agreement is included as an
exhibit to this current report.
ITEM 7. Financial Statements and Exhibits.
Exhibit Description
10.13 Settlement Agreement between the Registrant,
Diversified and the Trustee, see sequentially
numbered page 3, together with the Memorandum of
agreed-upon modifications and amended thereto).
Signatures Pursuant to the requirements of the
Securities Act of 1934, as amended, the
Registrant has duly caused this report to be
signed on its behalf by the undersigned
hereunto duly authorized.
Equity Growth Systems, Inc.
June 30, 1997 By:_________________________
Edward Granville-Smith, Jr., Chairman
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
MEMORANDUM FROM DIVERSIFIED TO GRANVILLE-SMITH
AS ATTACHED TO THE SETTLEMENT AGREEMENT (EXHIBIT 10.13)
DATED APRIL 24, 1997
(ON DIVERSIFIED LETTERHEAD)
Diversified Corporate Consulting Group, L.L.C.
A Delaware Limited Liability Company
Business Consultants & Advisors
MEMORANDUM
TO: Edward Granville-Smith
FROM: William A Calvo, III
DATE: April 24, 1997
SUBJECT: Matters Ancillary to Settlement Agreement
REFERENCES: Modifications Proposed by Jay C. Salyer, Jr.
Dear Ted:
Confirming our conversation of this morning:
1. The Settlement Agreement is to be executed in its original
form.
2. To the extent that any of the following hold more than 10%
of the common stock in Equity Growth Systems, Inc. or serve
as officers or directors thereof, they are subject to
resale restrictions imposed by Securities and Exchange
Commission Rule 144:
A. William A. Calvo, III (40,000 shares);
B. William A. Calvo, III as trustee for William A Calvo,
IV (40,000);
C. William A. Calvo, III as trustee for Alexander
Nicholas Calvo (40,000 shares);
D. William A. Calvo, III, as trustee for Edward Patrick
Calvo (40,000 shares);
E. Cyndi Noyes Calvo (40,000 shares);
F. William A. Calvo, III & Cyndi Noyes Calvo, JTWRS
(100,000 shares);
G. Joseph D. Radcliffe (200,000 shares);
H. Diversified Corporate Consulting Group, L.L.C.
(2000,000 shares);
I. Dennis Radcliffe (50,000 shares); and
J. Michael J. Radcliffe (50,000 shares).
3. Immediately following execution of the settlement agreement
and filing thereof, Diversified Corporate Consulting Group,
L.L.C., and Joseph D. Radcliffe (each record holders of
200,000 shares, approximately 5.9% of the outstanding
common stock), and, William A. Calvo, III (the holder of
40,000 shares of common stock as an individual, 100,000
shares as a joint tenant with his wife and 120,000 shares
as a trustee for his children), will file Forms 3 and
Schedules 13(g) prepared by your legal counsel in form
satisfactory to me with the Securities and Exchange
Commission, complying with reporting obligations for
holders of more than 5% and 10% respectively of a Section
12(g) issuer's common stock. Such forms will aggregate the
securities owned by the foregoing persons not filing such
reports with those of the reporting persons and will
disclose the basis for such aggregation, although Dennis
Radcliffe, Michael J. Radcliffe and Cyndi Noyes Calvo may
not meet the aggregation requirements. It is also possible
that the children for whom I serve as trustee will not meet
such aggregation requirements.
4. In conjunction with the foregoing, to the extent that any
of the foregoing are required to transfer securities in
order to meet tasks requested by you or anyone authorized
to act for Equity Growth Systems, Inc. (E.g., payments to
other consultants or service providers), such person would
be reimbursed in kind from Equity Growth Systems, Inc.,
immediately thereafter. Any such transactions shall, to
the extent legally possible, be exempt from any of the
foregoing restrictions.
5. In consideration for the foregoing, each such person shall,
for so long as the foregoing legal impediments exist, have
the right to have their shares registered with the
Securities and Exchange Commission on any registration or
notification statement filed by Equity Growth Systems, Inc.
under the Securities Act of 1933, as amended, as well as
with any state securities regulatory authorities; subject
to such reasonable restrictions negotiated with them in
good faith, as the underwriters involved in such
transaction may request.
6. The foregoing restrictions will cease to apply at the time
that they are no longer legally mandated.
With best personal regards, we are
Very truly yours
Diversified Corporate Consulting Group, L.L.C.
William A. Calvo, III
Managing Member
The forgoing is hereby accepted, as of the date first set forth
above:
Equity Growth Systems, Inc.
Edward Granville-Smith
Chairman and Chief Executive Officer
TIME AND EXPENSE RECORD FROM DIVERSIFIED TO GRANVILLE-SMITH
AS ATTACHED TO THE MEMORANDUM
DATED JANUARY 6, 1997
(ON DIVERSIFIED LETTERHEAD)
Administrative Offices
Diversified Corporate Consulting Group, L.L.C.
A Delaware Limited Liability Company
Business Consultants & Advisors
January 6, 1997
Equity Growth Systems, Inc.
Ted Granville-Smith
3821 B Tamiami Trail, Suite 201
Port Charlotte, FL 33952
Time and Expense Record
Dates: December 1, 1996 - December 31, 1996
Principal Provider's Name: William A. Calvo, III
SUMMARY OF EXPENSES
Client Date Time/Cat/Mat/Exp Comments
Granville 12/02 0.5/SEC-Corp/Infotec Reviewed 10-OSB from Edgar,
sent critique to GM, along
with notification of intent
to commence interpleader
action.
Granville 12/03 0.5/SEC-Corp/Infotec Sent files to GLG for
interpleader action.
Monitoring commencement
of interpleader action.
Granville 12/04 0.3/SEC-Corp/Infotec Monitoring GLG interpleader
action.
Granville 12/05 0.1/SEC-Corp/Infotec Monitoring GLG interpleader
action.
Granville 12/06 1.5/SEC-Corp/Infotec Monitoring GLG interpleader
action. T/Empire
Securities.Prepared letter
to Empire re:Problems and
withdrawl of 15c2-11.
Granville 12/11 1.0/SEC-Corp/Infotec Discussed Empire response
w/JDR and GLG. Drafted and
sent letter to Empire with
copies to Moffitt, JDR,
RDB, and GLG.
Granville 12/12 0.1/SEC-Corp/Infotec Monitoring GLG interpleader
action.
Granville 12/16 0.1/SEC-Corp/Infotec Monitor GLG litigation.
Granville 12/17 0.1/SEC-Corp/Infotec Monitor GLG litigation.
Granville 12/18 0.1/SEC-Corp/Infotec Monitor GLG litigation.
BILLING SUMMARY
Total New Billing (4.3 hours x $250.) = $ 1,075.00
Total Old Billing = $106,283.68
Total Collections (hours x $65.) = $
Total Paralegal Billing (hours x $55.) = $
Total Secretarial & Clerical
(.7 hrs x $35.) = $ 24.50
Total Phone, Fax, & Postage = $ 9.47
Payments on Account = $ .00
Total Now Due = $107,392.65
Please make your check payable to William A. Calvo, III, and
address it to William A. Calvo, III, c/o The Calvo Family, 1941
Southeast 51st Terrace, Ocala, Florida 34471.
With best personal regards, we are
Very truly yours,
Vanessa II. Mitchem, Paralegal
