CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into by
and between GAFF GROUP, INC., a California corporation (the "Client") and EQUITY
GROWTH SYSTEMS, INC., a publicly held Delaware corporation with a class of
equity securities registered under Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act" and "Equity Growth," respectively; the
Client and Equity Growth being hereinafter collectively referred to as the
"Parties" and generically as a "Party").
PREAMBLE :
WHEREAS, Client is engaged in the real estate industry, as more
particularly described in the materials annexed hereto and made a part
hereof as composite exhibit 0.1; and
WHEREAS, the Client desires to become a reporting company under federal
securities laws with a publicly traded class of securities; and
WHEREAS, Equity Growth personnel have substantial experience with law,
accounting and the regulatory obligations imposed under federal
securities laws and regulations, and provide assistance to companies that
desire to attain reporting status under Section 12(g) of the Exchange
Act; and
WHEREAS, Equity Growth is agreeable to making its services available to
the Client, on the terms and subject to the conditions hereinafter set
forth:
NOW, THEREFORE, in consideration for Equity Growth's agreement to render
the hereinafter described services as well as of the premises, the sum of
TEN ($10) DOLLARS, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Parties, intending to
be legally bound, hereby agree as follows:
WITNESSETH:
ARTICLE ONE
OBLIGATIONS OF THE PARTIES
1.1 DESCRIPTION OF SERVICES
(A) Equity Growth will assist the Client's legal counsel, or, as
set forth below, provide its own legal counsel, to register
its securities with the Securities and Exchange Commission
(the "SEC"), and thereafter, will assist the Client to make
arrangements required to permit trading of the Client's
securities on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc., including
introductions to one or more potential market makers and
assistance in the preparation, filing and management of the
SEC and NASD Rule 15c2-11 compliance filings which will be
required by any broker dealers publishing quotes in the
Client's securities.
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(B) Equity Growth will assist the Client to obtain a CUSIP number for its
securities, to obtain a stock trading symbol and to list the Client in a
Standard & Poors or comparable securities manual complying with the
manual exemption from Blue Sky registration in 15 or more states.
(C) Because of the Client's anticipated status under federal
securities laws, in any circumstances where Equity Growth is
describing the securities of to a third Party, Equity Growth
shall disclose to such person the compensation received from
the Client to the extent required under any applicable laws,
including, without limitation, Section 17(b) of the
Securities Act of 1933, as amended (the "Securities Act");
however, the Parties acknowledge they do not contemplate that
Equity Growth shall be involved in any activities on behalf
of the Client requiring such descriptions or disclosures, or
that the Services involve any activities subject to
regulation under federal or state securities laws, except for
the introduction of the Client and its principals to
licensed broker dealers in securities, securities analysts
and appropriate corporate information and stockholder
relations specialists.
1.2 FIDUCIARY OBLIGATION TO CLIENT
In rendering its services, Equity Growth shall not disclose to any third
party any confidential non-public information furnished by the Client or
otherwise obtained by it with respect to the Client.
1.3 LIMITATIONS ON SERVICES
(A) The Parties recognize that certain responsibilities and
obligations are imposed by federal and state securities laws
and by the applicable rules and regulations of stock
exchanges, the National Association of Securities Dealers,
Inc. (collectively with its subsidiaries being hereinafter
referred to as the "NASD"), in-house "due diligence" or
"compliance" departments of licensed securities firms, etc.;
accordingly, Equity Growth agrees that it will not release
any information or data about the Client to any selected or
limited person(s), entity, or group if Equity Growth is aware
that such information or data has not been generally released
or promulgated.
(B) Equity Growth shall restrict or cease, as directed by the Client, all
efforts on behalf of the Client, including all dissemination of
information regarding the Client, immediately upon receipt of
instructions (in writing by fax or letter) to that effect from the
Client.
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1.4 EQUITY GROWTH'S COMPENSATION
(A) (1) The Client shall issue, directly to Equity Growth's
stockholders of record on the 30th day following the
date of this agreement, pro rata based on their
ownership of common stock in Equity Growth, a quantity
of the Client's common stock equal to 15% of the total
outstanding capital stock of the Client, immediately
following such issuance, subject to anti-dilutive
rights for a period of 12 months following the
original date of issuance (the "Public Shares").
(2) The Public Shares shall be issued either:
(a) in reliance on either Rule 504 of SEC Regulation D or Section 4(6)
of the Securities Act, and comparable provisions of the securities
laws in each of the recipient's state of domicile, or
(b) pursuant to a registration on SEC Form SB-1 or SB-2, or a
notification statement pursuant to SEC Regulation A;
and Equity Growth will assist the Client to prepare and file
required documentation associated therewith, at the Client's
expense.
(3) Prior to the issuance of the Public Shares Equity Growth will
assist the Client to comply with any obligations under SEC Rule
10b-17 pertaining to dividends.
(4) The Parties hereby agree that for auditing, tax, Rule 504 or SEC
filing fee purposes, the reasonable market value of the Public
Shares is the lesser of $50,000 or 15% of the Client's
stockholders equity.
(B) (1) In the event that the Client desires to avail itself
of the legal services of Equity Growth's general
counsel to prepare and file the required SEC
registration statements, it will pay Equity Growth the
sum of $15,000, plus out of pocket costs and expenses,
provided that not more than four amendments thereto
are required, and that the Client provides timely and
complete assistance in responding to SEC comment
letters (additional costs resulting from failure of
such assumptions being billed at such counsel's normal
hourly fees for securities related filings).
(2) Equity Growth believes that the Client will have to pay the
following additional costs in conjunction with the projects
contemplated by this Agreement:
C. Auditing costs, the amount of which the Client is not
competent to determine;
D. The costs of obtaining a CUSIP number and listing with Standard &
Poors or another comparable manual, which is estimated to be
$4,000;
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E. Transfer agent set up and certificate distribution
costs which will vary, based on the agency selected
and the initial services required, but should not
exceed $15,000 for physical delivery of certificates
to each stockholder, assuming that such delivery can
be structured over several months. In the event that
book entry recording in lieu of physical delivery is a
legally available alternative and the costs of
certificates are born by stockholders requesting them,
then the costs can be cut dramatically (in the $5,000
range);
F. Filing fees to the SEC and State regulatory authorities, not
expected to exceed $5,000;
G. Travel, long distance telephone, overnight postage and mailing
expenses, not expected to exceed $2,500.
(C) In addition to the compensation described above with reference to
services during the Initial Term of this Agreement and whether or not the
following services are rendered during such Initial Term:
(1) In the event that Equity Growth arranges or provides funding for
Client on terms more beneficial than those reflected in Client's
current principal financing agreements, Equity Growth shall be
entitled, at its election, to either:
(a) A fee equal to 25% of such savings, on a continuing
basis; or
(b) If equity funding is provided though Equity Growth or
any affiliates thereof, a discount of 10% from the bid
price for the subject equity securities, if they are
issuable as free trading securities, or, a discount of
50% from the bid price for the subject equity
securities, if they are issuable as restricted
securities (as the term restricted is used for
purposes of SEC Rule 144); or
(b) If funding is provided by any person or group of
persons introduced to the Client by Equity Growth or
persons associated with Equity Growth, directly or
indirectly, but is not provided by Equity Growth or
its principals as described in the preceding sub
section, then Equity Growth shall be entitled to an
introduction fee equal to 5% of the aggregate proceeds
so obtained; and
(2) In the event that Equity Growth generates business for the Client,
then, on any sales resulting therefrom, Equity Growth shall be
entitled to a commission equal to 10% of the gross income derived
by the Client therefrom, on a continuing basis.
(3) In the event that Equity Growth or any affiliate thereof arranges
for an acquisition by the Client, then Equity Growth shall be
entitled to compensation equal to 10% of the compensation paid for
such acquisition, in addition to any compensation negotiated and
received from the acquired entity or its affiliates.
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(D) The Client will assure that its legal counsel promptly
prepares all reports which then existing holders of the
Client's securities (including Equity Growth, its affiliates
and successors in interest) are required to file with the
Securities and Exchange Commission as a result of the
Client's reporting status, including Securities and Exchange
Commission Forms 3, 4 and 5, Schedules 13(d) and Schedules
13(g), and shall submit all such reports to the subject
stockholders for prompt execution and timely filing with the
Securities and Exchange Commission.
(E) (1) In addition to payment of fees, the Client will be responsible
for payment of all costs and disbursements associated with Equity
Growth's services either:
(a) Involving less than $50 per item and $200 in the aggregate during
the preceding 30 day period; or
(b) Reflected in an operating budget approved by the
Client; or
(c) Approved in writing by the Client; provided, however, that the
refusal by the Client to approve expenditures required for the
proper performance of Equity Growth's services will excuse
performance of such services.
(2) All of Equity Growth's statements will be paid within 10 days
after receipt.
(3) In the event additional time for payment is required, Equity
Growth will have the option of selling the account receivable and
the Client agrees to pay interest thereon at the monthly rate of
1%.
(4) In the event collection activities are required, the Client agrees
to pay all of Equity Growth's out of pocket costs associated
therewith.
(5) There will be no change or waiver of the provisions contained
herein, unless such charge is in writing and signed by the Client
and Equity Growth.
1.5 CLIENT'S COMMITMENTS
(A). (1) All work requiring legal review will be submitted for
approval by the Client to the Client's legal counsel
prior to its use.
(2) Final drafts of any matters prepared for use by Equity Growth in
conjunction with the provision of the Services will be reviewed by
the Client and, if legally required, by the Client's legal
counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
(2) Only after such review and approval by the Client and, if
required, the Client's legal counsel, will any documents be filed
with regulatory agencies or provided to Equity Growth or third
parties.
(3) (a) Financial data will be reviewed by competent,
independent, certified public accountants experienced and
qualified in securities related accounting, to be
separately retained by the Client.
(b) Such accountants will be required to review and approve all
financially related filings, prior to release to Equity Growth,
other third parties or submission to the appropriate regulatory
authorities.
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(B) (1) The Client shall supply Equity Growth on a regular and
timely basis with all approved data and information
about the Client, its management, its products, and
its operations and the Client shall be responsible for
advising Equity Growth of any fact which would affect
the accuracy of any prior data and information
supplied to Equity Growth.
(2) The Client shall use its best efforts to promptly supply Equity
Growth with full and complete copies of all filings with all
federal and state securities agencies; with full and complete
copies of all shareholder reports and communications whether or
not prepared with Equity Growth's assistance, with all data and
information supplied to any analyst, broker-dealer, market maker,
or other member of the financial community; and with all
product/services brochures, sales materials, etc.
(3) The Client shall promptly notify Equity Growth of the filing of
any registration statement for the sale of securities and/or of
any other event which triggers any restrictions on publicity.
(4) The Client shall be deemed to make a continuing representation of
the accuracy of any and all material facts, material, information,
and data which it supplies to Equity Growth and the Client
acknowledges its awareness that Equity Growth will rely on such
continuing representation in performing its functions under this
Agreement.
(5) Equity Growth, in the absence of notice in writing from the
Client, may rely on the continuing accuracy of material,
information and data supplied by the Client.
ARTICLE TWO
TERM, RENEWALS & EARLIER TERMINATION
2.1 TERM.
This Agreement shall be for an initial term of 180 days, commencing on
the date of its complete execution by all Parties, as evinced in the execution
page hereof, but shall be extended, as required to permit completion of the
projects contemplated hereby (attaining trading status for the Client's
securities as an issuer filing reports with the SEC pursuant to Section 12[g] of
the Exchange Act (the "Initial Term").
2.2 RENEWALS.
Subject to prior agreement as to additional compensation payable to
Equity Growth, this Agreement shall be renewed automatically, after expiration
of the original term, on a continuing annual basis, unless the Party wishing not
to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
2.3 FINAL SETTLEMENT.
(A) Upon termination of this Agreement and payment to Equity
Growth of all amounts due it hereunder, Equity Growth or its
representative shall execute and deliver to the Client a
receipt for such sums and a release of all claims, except
such claims as may have been submitted pursuant to the terms
of this Agreement and which remain unpaid, and, shall
forthwith tender to the Client all records, manuals and
written procedures, as may be desired by the Client for the
continued conduct of its business; and
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(B) The Client or its representative shall execute and deliver to
Equity Growth a receipt for all materials returned and a
release of all claims, except such claims as may have been
submitted pursuant to the terms of this Agreement and which
remain unpaid, and, shall forthwith tender to Equity Growth
all records, manuals and written procedures, as may be
desired by Equity Growth for the continued conduct of its
business.
ARTICLE THREE
EQUITY GROWTH'S CONFIDENTIALITY & COMPETITION COVENANTS
3.1 GENERAL PROVISIONS.
(A) Equity Growth acknowledges that, in and as a result of its
entry into this Agreement, it will be making use of
confidential information of special and unique nature and
value relating to such matters as the Client's trade secrets,
systems, procedures, manuals, confidential reports;
consequently, as material inducement to the entry into this
Agreement by the Client, Equity Growth hereby covenants and
agrees that it shall not, at anytime during the term of this
Agreement, any renewals thereof and for two years following
the terms of this Agreement, directly or indirectly, use,
divulge or disclose, for any purpose whatsoever, any of such
confidential information which has been obtained by or
disclosed to it as a result of its entry into this Agreement
or provision of services hereunder.
(B) In the event of a breach or threatened breach by Equity
Growth of any of the provisions of this Article Three, the
Client, in addition to and not in limitation of any other
rights, remedies or damages available to the Client, whether
at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach
by Equity Growth, or by its partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
3.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to the Client and its clients as a result of a breach by Equity Growth of the
covenants or agreements contained in this Article Three, and in view of the lack
of an adequate remedy at law to protect the Client's interests, Equity Growth
hereby covenants and agrees that the Client shall have the following additional
rights and remedies in the event of a breach hereof:
(A) Equity Growth hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Three; and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which the Client or its clients may sustain prior
to the effective enforcement of such injunction, Equity Growth hereby
covenants and agrees to pay over to the Client, in the event it violates
the covenants and agreements contained in this Article Three, the greater
of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by the Client or its clients as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to the Client for any
breach of the covenants and agreements contained in this Article
Three, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect the Client
and its clients from the injury caused by such breaches would be
injunctive relief.
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3.3 CUMULATIVE REMEDIES.
Equity Growth hereby irrevocably agrees that the remedies described in
this Article Three shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Client and its clients are or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
3.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) Equity Growth hereby represents, warrants and acknowledges
that its members or officers and directors have carefully
read and considered the provisions of this Article Three and,
having done so, agrees that the restrictions set forth herein
are fair and reasonable and are reasonably required for the
protection of the interests of the Client, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, Equity Growth hereby covenants,
agrees and directs such court to substitute a reasonable
judicially enforceable limitation in place of any limitation
deemed unenforceable and, Equity Growth hereby covenants and
agrees that if so modified, the covenants contained in this
Article Three shall be as fully enforceable as if they had
been set forth herein directly by the Parties.
(B) In determining the nature of this limitation, Equity Growth hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute arising hereunder recognize that the
Parties desire that these covenants not to compete or circumvent be
imposed and maintained to the greatest extent possible.
3.5 EXCLUSIVITY.
Equity Growth shall not be required to devote all of its business time to
the affairs of the Client, rather it shall devote such time as it is reasonably
necessary in light of its other business commitments.
ARTICLE FOUR
CLIENT'S CONFIDENTIALITY & COMPETITION COVENANTS
4.1 GENERAL PROHIBITIONS
(A) The Client acknowledges that, in and as a result of its
engagement of Equity Growth, the Client will be making use of
confidential information of special and unique nature and
value relating to such matters as Equity Growth's business
contacts, professional advisors, trade secrets, systems,
procedures, manuals, confidential reports, lists of clients,
potential customers and funders; consequently, as material
inducement to the entry into this Agreement by Equity Growth,
the Client hereby covenants and agrees that it shall not, at
anytime during the term of this Agreement, any renewals
thereof an for two years following the terms of this
Agreement, directly or indirectly, use, divulge or disclose,
for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to it as
a result of its employment of Equity Growth, or Equity
Growth's affiliates.
(B) In the event of a breach or threatened breach by the Client
of any of the provisions of this Article Four, Equity Growth,
in addition to and not in limitation of any other rights,
remedies or damages available to Equity Growth, whether at
law or in equity, shall be entitled to a permanent injunction
in order to prevent or to restrain any such breach by the
Client, or by the Client's partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
4.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to Equity Growth as a result of a breach by the Client of the covenants or
agreements contained in this Article Four, and in view of the lack of an
adequate remedy at law to protect Equity Growth's interests, the Client hereby
covenants and agrees that Equity Growth shall have the following additional
rights and remedies in the event of a breach hereof:
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(A) The Client hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Four is and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which Equity Growth may sustain prior to the
effective enforcement of such injunction, the Client hereby covenants and
agrees to pay over to Equity Growth, in the event it violates the
covenants and agreements contained in this Article Four, the greater of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by Equity Growth as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the
exclusive remedy available to Equity Growth for any breach of the
covenants and agreements contained in this Article Four, prior to
the issuance of such injunction, the Parties recognizing that the
only adequate remedy to protect Equity Growth from the injury
caused by such breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
The Client hereby irrevocably agrees that the remedies described in this
Article Four shall be in addition to, and not in limitation of, any of the
rights or remedies to which Equity Growth is or may be entitled to, whether at
law or in equity, under or pursuant to this Agreement.
4.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) The Client hereby represents, warrants and acknowledges that
its officers and directors have carefully read and
considered the provisions of this Article Four and, having
done so, agree that the restrictions set forth herein are
fair and reasonable and are reasonably required for the
protection of the interests of Equity Growth, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, the Client hereby covenants, agrees
and directs such court to substitute a reasonable judicially
enforceable limitation in place of any limitation deemed
unenforceable and, the Client hereby covenants and agrees
that if so modified, the covenants contained in this Article
Four shall be as fully enforceable as if they had been set
forth herein directly by the Parties.
(B) In determining the nature of this limitation, the Client hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute hereunder recognize that the Parties
desire that these covenants not to compete or circumvent be imposed and
maintained to the greatest extent possible.
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ARTICLE FIVE
MISCELLANEOUS
5.1 NOTICES.
All notices, demands or other written communications hereunder shall be
in writing, and unless otherwise provided, shall be deemed to have been duly
given on the first business day after mailing by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
TO EQUITY GROWTH:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Telephone (941)
▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with copies to
THE YANKEE COMPANIES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
and
THE YANKEE COMPANIES, INC.1941 Southeast 51st
Terrace; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Administrative Officer
TO THE CLIENT:
GAFF GROUP, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such
address, telephone and fax numbers
as are reflected on the SEC's ▇▇▇▇▇ Internet site;
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President & Chief Executive Officer
in each case, with copies to such other address or to such other persons as any
Party shall designate to the others for such purposes in the manner hereinabove
set forth.
5.2 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by Parties.
5.3 MERGER.
(A) 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.
(B) All prior agreements whether written or oral are merged herein and shall
be of no force or effect.
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5.4 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.
5.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than a conditions precedent, if any, 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 provision 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.
5.6 GOVERNING LAW AND VENUE.
This Agreement shall be construed in accordance with the laws of the
State of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in Palm Beach County, Florida.
5.7 DISPUTE RESOLUTION IN LIEU OF LITIGATION.
(A) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (a) First, the issue shall be submitted to mediation before
a mediation service in Palm Beach County, Florida to be
selected by lot from six alternatives to be provided, three
by Equity Growth and three by the Client.
(b) The mediation efforts shall be concluded within ten business days
after their initiation unless the Parties unanimously agree to an
extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit
the dispute to binding arbitration before an arbitration service
located in Palm Beach County, Florida, to be selected by lot, from
six alternatives to be provided, in the manner set forth above for
selection of a mediator;
(3) (A) Expenses of mediation shall be borne by the Parties
equally if successful but if unsuccessful, expenses of
mediation and of arbitration shall be borne by the Party or
Parties against whom the arbitration decision is rendered.
(B) If the terms of the arbitral award do not establish a prevailing
Party, then the expenses of unsuccessful mediation and arbitration
shall be borne 1/2 by the Client and 1/2 by Equity Growth.
(B) Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
(C) 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.
5.8 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, jointly and severally, their successors,
assigns, personal representatives, estate, heirs and legatees.
5.9 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.
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5.10 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.
5.11 FURTHER ASSURANCES.
The Parties hereby 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 of 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.
5.12 STATUS.
(A) Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship.
(B) Throughout the term of this Agreement, Equity Growth shall serve an
independent contractor, as that term is defined by the United States
Internal Revenue Service, and in conjunction therewith, shall be
responsible for all of his own tax reporting and payment obligations.
(C) In amplification of the foregoing, Equity Growth shall, subject to
reasonable reimbursement on a pre-approved budgetary basis, be
responsible for providing its own office facilities and supporting
personnel.
5.13 COUNTERPARTS.
(A) This Agreement may be executed in any number of counterparts delivered
through facsimile transmission.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
5.14 LICENSE.
(A) (1) This Agreement is the property of The Yankee Companies, Inc.,
a Florida corporation which serves as a strategic consultant to
Equity Growth ("Yankees").
(2) The use hereof by the Parties is authorized hereby solely for
purposes of this transaction and, the use of this form of
agreement or of any derivation thereof without Yankees' prior
written permission is prohibited.
(3) This Agreement shall not be construed more stringently or
interpreted less favorably against Equity Growth based on
authorship.
(B) The Client hereby acknowledge that neither Yankees nor Equity Growth is a
law firm and that neither provided it with any advice, legal or
otherwise, in conjunction with this Agreement, but rather, has suggested
that it rely solely on its own experience and advisors in evaluating or
interpreting this Agreement.
22
IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
GAFF GROUP, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, SECRETARY
{Seal}
EQUITY GROWTH SYSTEMS, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SECRETARY
{Seal}
23
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into by
and between GOLDEN JERSEY PRODUCTS, INC., a Florida corporation (the "Client")
and EQUITY GROWTH SYSTEMS, INC., a publicly held Delaware corporation with a
class of equity securities registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act" and "Equity Growth,"
respectively; the Client and Equity Growth being hereinafter collectively
referred to as the "Parties" and generically as a "Party").
PREAMBLE :
WHEREAS, Client is engaged in the development and marketing of dairy and
dairy substitute products, as more particularly described in the
materials annexed hereto and made a part hereof as composite exhibit 0.1;
and
WHEREAS, the Client desires to become a reporting company under federal
securities laws with a publicly traded class of securities; and
WHEREAS, Equity Growth personnel have substantial experience with law,
accounting and the regulatory obligations imposed under federal
securities laws and regulations, and provide assistance to companies that
desire to attain reporting status under Section 12(g) of the Exchange
Act; and
WHEREAS, Equity Growth is agreeable to making its services available to
the Client, on the terms and subject to the conditions hereinafter set
forth:
NOW, THEREFORE, in consideration for Equity Growth's agreement to render
the hereinafter described services as well as of the premises, the sum of
TEN ($10) DOLLARS, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Parties, intending to
be legally bound, hereby agree as follows:
WITNESSETH:
ARTICLE ONE
OBLIGATIONS OF THE PARTIES
1.1 DESCRIPTION OF SERVICES
(A) Equity Growth will assist the Client's legal counsel, or, as
set forth below, provide its own legal counsel, to register
its securities with the Securities and Exchange Commission
(the "SEC"), and thereafter, will assist the Client to make
arrangements required to permit trading of the Client's
securities on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc., including
introductions to one or more potential market makers and
assistance in the preparation, filing and management of the
SEC and NASD Rule 15c2-11 compliance filings which will be
required by any broker dealers publishing quotes in the
Client's securities.
24
(B) Equity Growth will assist the Client to obtain a CUSIP number for its
securities, to obtain a stock trading symbol and to list the Client in a
Standard & Poors or comparable securities manual complying with the
manual exemption from Blue Sky registration in 15 or more states.
(C) Because of the Client's anticipated status under federal
securities laws, in any circumstances where Equity Growth is
describing the securities of to a third Party, Equity Growth
shall disclose to such person the compensation received from
the Client to the extent required under any applicable laws,
including, without limitation, Section 17(b) of the
Securities Act of 1933, as amended (the "Securities Act");
however, the Parties acknowledge they do not contemplate that
Equity Growth shall be involved in any activities on behalf
of the Client requiring such descriptions or disclosures, or
that the Services involve any activities subject to
regulation under federal or state securities laws, except for
the introduction of the Client and its principals to
licensed broker dealers in securities, securities analysts
and appropriate corporate information and stockholder
relations specialists.
1.2 FIDUCIARY OBLIGATION TO CLIENT
In rendering its services, Equity Growth shall not disclose to any third
party any confidential non-public information furnished by the Client or
otherwise obtained by it with respect to the Client.
1.3 LIMITATIONS ON SERVICES
(A) The Parties recognize that certain responsibilities and
obligations are imposed by federal and state securities laws
and by the applicable rules and regulations of stock
exchanges, the National Association of Securities Dealers,
Inc. (collectively with its subsidiaries being hereinafter
referred to as the "NASD"), in-house "due diligence" or
"compliance" departments of licensed securities firms, etc.;
accordingly, Equity Growth agrees that it will not release
any information or data about the Client to any selected or
limited person(s), entity, or group if Equity Growth is aware
that such information or data has not been generally released
or promulgated.
(B) Equity Growth shall restrict or cease, as directed by the Client, all
efforts on behalf of the Client, including all dissemination of
information regarding the Client, immediately upon receipt of
instructions (in writing by fax or letter) to that effect from the
Client.
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1.4 EQUITY GROWTH'S COMPENSATION
(A) (1) The Client shall issue, directly to Equity Growth's
stockholders of record on the 30th day following the
date of this agreement, pro rata based on their
ownership of common stock in Equity Growth, a quantity
of the Client's common stock equal to 10% of the total
outstanding capital stock of the Client, immediately
following such issuance, subject to anti-dilutive
rights for a period of 12 months following the
original date of issuance (the "Public Shares").
(2) The Public Shares shall be issued either:
(a) in reliance on either Rule 504 of SEC Regulation D or Section 4(6)
of the Securities Act, and comparable provisions of the securities
laws in each of the recipient's state of domicile, or
(b) pursuant to a registration on SEC Form SB-1 or SB-2, or a
notification statement pursuant to SEC Regulation A;
and Equity Growth will assist the Client to prepare and file
required documentation associated therewith, at the Client's
expense.
(3) Prior to the issuance of the Public Shares Equity Growth will
assist the Client to comply with any obligations under SEC Rule
10b-17 pertaining to dividends.
(4) The Parties hereby agree that for auditing, tax, Rule 504 or SEC
filing fee purposes, the reasonable market value of the Public
Shares is the lesser of $50,000 or 10% of the Client's
stockholders equity.
(B) (1) In the event that the Client desires to avail itself
of the legal services of Equity Growth's general
counsel to prepare and file the required SEC
registration statements, it will pay Equity Growth the
sum of $15,000, plus out of pocket costs and expenses,
provided that not more than four amendments thereto
are required, and that the Client provides timely and
complete assistance in responding to SEC comment
letters (additional costs resulting from failure of
such assumptions being billed at such counsel's normal
hourly fees for securities related filings).
(2) Equity Growth believes that the Client will have to pay the
following additional costs in conjunction with the projects
contemplated by this Agreement:
H. Auditing costs, the amount of which the Client is not
competent to determine;
I. The costs of obtaining a CUSIP number and listing with
Standard & Poors or another comparable manual, which
is estimated to be $4,000;
J. Transfer agent set up and certificate distribution
costs which will vary, based on the agency selected
and the initial services required, but should not
exceed $15,000 for physical delivery of certificates
to each stockholder, assuming that such delivery can
be structured over several months. In the event that
book entry recording in lieu of physical delivery is a
legally available alternative and the costs of
certificates are born by stockholders requesting them,
then the costs can be cut dramatically (in the $5,000
range);
K. Filing fees to the SEC and State regulatory authorities, not
expected to exceed $5,000;
L. Travel, long distance telephone, overnight postage and mailing
expenses, not expected to exceed $2,500.
26
(C) In addition to the compensation described above with reference to
services during the Initial Term of this Agreement and whether or not the
following services are rendered during such Initial Term:
(1) In the event that Equity Growth arranges or provides funding for
Client on terms more beneficial than those reflected in Client's
current principal financing agreements, Equity Growth shall be
entitled, at its election, to either:
(a) A fee equal to 25% of such savings, on a continuing
basis; or
(b) If equity funding is provided though Equity Growth or
any affiliates thereof, a discount of 10% from the bid
price for the subject equity securities, if they are
issuable as free trading securities, or, a discount of
50% from the bid price for the subject equity
securities, if they are issuable as restricted
securities (as the term restricted is used for
purposes of SEC Rule 144); or
(b) If funding is provided by any person or group of
persons introduced to the Client by Equity Growth or
persons associated with Equity Growth, directly or
indirectly, but is not provided by Equity Growth or
its principals as described in the preceding sub
section, then Equity Growth shall be entitled to an
introduction fee equal to 5% of the aggregate proceeds
so obtained; and
(2) In the event that Equity Growth generates business for the Client,
then, on any sales resulting therefrom, Equity Growth shall be
entitled to a commission equal to 10% of the gross income derived
by the Client therefrom, on a continuing basis.
(3) In the event that Equity Growth or any affiliate thereof arranges
for an acquisition by the Client, then Equity Growth shall be
entitled to compensation equal to 10% of the compensation paid for
such acquisition, in addition to any compensation negotiated and
received from the acquired entity or its affiliates.
(D) The Client will assure that its legal counsel promptly
prepares all reports which then existing holders of the
Client's securities (including Equity Growth, its affiliates
and successors in interest) are required to file with the
Securities and Exchange Commission as a result of the
Client's reporting status, including Securities and Exchange
Commission Forms 3, 4 and 5, Schedules 13(d) and Schedules
13(g), and shall submit all such reports to the subject
stockholders for prompt execution and timely filing with the
Securities and Exchange Commission.
(E) (1) In addition to payment of fees, the Client will be responsible
for payment of all costs and disbursements associated with Equity
Growth's services either:
(a) Involving less than $50 per item and $200 in the aggregate during
the preceding 30 day period; or
(b) Reflected in an operating budget approved by the
Client; or
(c) Approved in writing by the Client; provided, however, that the
refusal by the Client to approve expenditures required for the
proper performance of Equity Growth's services will excuse
performance of such services.
(2) All of Equity Growth's statements will be paid within 10 days
after receipt.
(3) In the event additional time for payment is required, Equity
Growth will have the option of selling the account receivable and
the Client agrees to pay interest thereon at the monthly rate of
1%.
(4) In the event collection activities are required, the Client agrees
to pay all of Equity Growth's out of pocket costs associated
therewith.
(5) There will be no change or waiver of the provisions contained
herein, unless such charge is in writing and signed by the Client
and Equity Growth.
27
1.5 CLIENT'S COMMITMENTS
(A). (1) All work requiring legal review will be submitted for
approval by the Client to the Client's legal counsel
prior to its use.
(2) Final drafts of any matters prepared for use by Equity Growth in
conjunction with the provision of the Services will be reviewed by
the Client and, if legally required, by the Client's legal
counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
(2) Only after such review and approval by the Client and, if
required, the Client's legal counsel, will any documents be filed
with regulatory agencies or provided to Equity Growth or third
parties.
(3) (a) Financial data will be reviewed by competent,
independent, certified public accountants experienced and
qualified in securities related accounting, to be
separately retained by the Client.
(b) Such accountants will be required to review and approve all
financially related filings, prior to release to Equity Growth,
other third parties or submission to the appropriate regulatory
authorities.
(B) (1) The Client shall supply Equity Growth on a regular and
timely basis with all approved data and information
about the Client, its management, its products, and
its operations and the Client shall be responsible for
advising Equity Growth of any fact which would affect
the accuracy of any prior data and information
supplied to Equity Growth.
(2) The Client shall use its best efforts to promptly supply Equity
Growth with full and complete copies of all filings with all
federal and state securities agencies; with full and complete
copies of all shareholder reports and communications whether or
not prepared with Equity Growth's assistance, with all data and
information supplied to any analyst, broker-dealer, market maker,
or other member of the financial community; and with all
product/services brochures, sales materials, etc.
(3) The Client shall promptly notify Equity Growth of the filing of
any registration statement for the sale of securities and/or of
any other event which triggers any restrictions on publicity.
(4) The Client shall be deemed to make a continuing representation of
the accuracy of any and all material facts, material, information,
and data which it supplies to Equity Growth and the Client
acknowledges its awareness that Equity Growth will rely on such
continuing representation in performing its functions under this
Agreement.
(5) Equity Growth, in the absence of notice in writing from the
Client, may rely on the continuing accuracy of material,
information and data supplied by the Client.
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ARTICLE TWO
TERM, RENEWALS & EARLIER TERMINATION
2.1 TERM.
This Agreement shall be for an initial term of 180 days, commencing on
the date of its complete execution by all Parties, as evinced in the execution
page hereof, but shall be extended, as required to permit completion of the
projects contemplated hereby (attaining trading status for the Client's
securities as an issuer filing reports with the SEC pursuant to Section 12[g] of
the Exchange Act (the "Initial Term").
2.2 RENEWALS.
Subject to prior agreement as to additional compensation payable to
Equity Growth, this Agreement shall be renewed automatically, after expiration
of the original term, on a continuing annual basis, unless the Party wishing not
to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
2.3 FINAL SETTLEMENT.
(A) Upon termination of this Agreement and payment to Equity
Growth of all amounts due it hereunder, Equity Growth or its
representative shall execute and deliver to the Client a
receipt for such sums and a release of all claims, except
such claims as may have been submitted pursuant to the terms
of this Agreement and which remain unpaid, and, shall
forthwith tender to the Client all records, manuals and
written procedures, as may be desired by the Client for the
continued conduct of its business; and
(B) The Client or its representative shall execute and deliver to
Equity Growth a receipt for all materials returned and a
release of all claims, except such claims as may have been
submitted pursuant to the terms of this Agreement and which
remain unpaid, and, shall forthwith tender to Equity Growth
all records, manuals and written procedures, as may be
desired by Equity Growth for the continued conduct of its
business.
ARTICLE THREE
EQUITY GROWTH'S CONFIDENTIALITY & COMPETITION COVENANTS
3.1 GENERAL PROVISIONS.
(A) Equity Growth acknowledges that, in and as a result of its
entry into this Agreement, it will be making use of
confidential information of special and unique nature and
value relating to such matters as the Client's trade secrets,
systems, procedures, manuals, confidential reports;
consequently, as material inducement to the entry into this
Agreement by the Client, Equity Growth hereby covenants and
agrees that it shall not, at anytime during the term of this
Agreement, any renewals thereof and for two years following
the terms of this Agreement, directly or indirectly, use,
divulge or disclose, for any purpose whatsoever, any of such
confidential information which has been obtained by or
disclosed to it as a result of its entry into this Agreement
or provision of services hereunder.
29
(B) In the event of a breach or threatened breach by Equity
Growth of any of the provisions of this Article Three, the
Client, in addition to and not in limitation of any other
rights, remedies or damages available to the Client, whether
at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach
by Equity Growth, or by its partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
3.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to the Client and its clients as a result of a breach by Equity Growth of the
covenants or agreements contained in this Article Three, and in view of the lack
of an adequate remedy at law to protect the Client's interests, Equity Growth
hereby covenants and agrees that the Client shall have the following additional
rights and remedies in the event of a breach hereof:
(A) Equity Growth hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Three; and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which the Client or its clients may sustain prior
to the effective enforcement of such injunction, Equity Growth hereby
covenants and agrees to pay over to the Client, in the event it violates
the covenants and agreements contained in this Article Three, the greater
of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by the Client or its clients as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to the Client for any
breach of the covenants and agreements contained in this Article
Three, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect the Client
and its clients from the injury caused by such breaches would be
injunctive relief.
3.3 CUMULATIVE REMEDIES.
Equity Growth hereby irrevocably agrees that the remedies described in
this Article Three shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Client and its clients are or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
3.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) Equity Growth hereby represents, warrants and acknowledges
that its members or officers and directors have carefully
read and considered the provisions of this Article Three and,
having done so, agrees that the restrictions set forth herein
are fair and reasonable and are reasonably required for the
protection of the interests of the Client, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, Equity Growth hereby covenants,
agrees and directs such court to substitute a reasonable
judicially enforceable limitation in place of any limitation
deemed unenforceable and, Equity Growth hereby covenants and
agrees that if so modified, the covenants contained in this
Article Three shall be as fully enforceable as if they had
been set forth herein directly by the Parties.
30
(B) In determining the nature of this limitation, Equity Growth hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute arising hereunder recognize that the
Parties desire that these covenants not to compete or circumvent be
imposed and maintained to the greatest extent possible.
3.5 EXCLUSIVITY.
Equity Growth shall not be required to devote all of its business time to
the affairs of the Client, rather it shall devote such time as it is reasonably
necessary in light of its other business commitments.
ARTICLE FOUR
CLIENT'S CONFIDENTIALITY & COMPETITION COVENANTS
4.1 GENERAL PROHIBITIONS
(A) The Client acknowledges that, in and as a result of its
engagement of Equity Growth, the Client will be making use of
confidential information of special and unique nature and
value relating to such matters as Equity Growth's business
contacts, professional advisors, trade secrets, systems,
procedures, manuals, confidential reports, lists of clients,
potential customers and funders; consequently, as material
inducement to the entry into this Agreement by Equity Growth,
the Client hereby covenants and agrees that it shall not, at
anytime during the term of this Agreement, any renewals
thereof an for two years following the terms of this
Agreement, directly or indirectly, use, divulge or disclose,
for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to it as
a result of its employment of Equity Growth, or Equity
Growth's affiliates.
(B) In the event of a breach or threatened breach by the Client
of any of the provisions of this Article Four, Equity Growth,
in addition to and not in limitation of any other rights,
remedies or damages available to Equity Growth, whether at
law or in equity, shall be entitled to a permanent injunction
in order to prevent or to restrain any such breach by the
Client, or by the Client's partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
4.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to Equity Growth as a result of a breach by the Client of the covenants or
agreements contained in this Article Four, and in view of the lack of an
adequate remedy at law to protect Equity Growth's interests, the Client hereby
covenants and agrees that Equity Growth shall have the following additional
rights and remedies in the event of a breach hereof:
(A) The Client hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Four is and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which Equity Growth may sustain prior to the
effective enforcement of such injunction, the Client hereby covenants and
agrees to pay over to Equity Growth, in the event it violates the
covenants and agreements contained in this Article Four, the greater of:
31
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by Equity Growth as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the
exclusive remedy available to Equity Growth for any breach of the
covenants and agreements contained in this Article Four, prior to
the issuance of such injunction, the Parties recognizing that the
only adequate remedy to protect Equity Growth from the injury
caused by such breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
The Client hereby irrevocably agrees that the remedies described in this
Article Four shall be in addition to, and not in limitation of, any of the
rights or remedies to which Equity Growth is or may be entitled to, whether at
law or in equity, under or pursuant to this Agreement.
4.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) The Client hereby represents, warrants and acknowledges that
its officers and directors have carefully read and
considered the provisions of this Article Four and, having
done so, agree that the restrictions set forth herein are
fair and reasonable and are reasonably required for the
protection of the interests of Equity Growth, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, the Client hereby covenants, agrees
and directs such court to substitute a reasonable judicially
enforceable limitation in place of any limitation deemed
unenforceable and, the Client hereby covenants and agrees
that if so modified, the covenants contained in this Article
Four shall be as fully enforceable as if they had been set
forth herein directly by the Parties.
(B) In determining the nature of this limitation, the Client hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute hereunder recognize that the Parties
desire that these covenants not to compete or circumvent be imposed and
maintained to the greatest extent possible.
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ARTICLE FIVE
MISCELLANEOUS
5.1 NOTICES.
All notices, demands or other written communications hereunder shall be
in writing, and unless otherwise provided, shall be deemed to have been duly
given on the first business day after mailing by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
TO EQUITY GROWTH:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Telephone (941)
▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with copies to
THE YANKEE COMPANIES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
and
THE YANKEE COMPANIES, INC.1941 Southeast 51st
Terrace; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Administrative Officer
TO THE CLIENT:
GOLDEN JERSEY PRODUCTS, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and, e-mail
▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
or at such address, telephone and fax numbers
as are reflected on the SEC's ▇▇▇▇▇ Internet site;
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & Chief Executive Officer
in each case, with copies to such other address or to such other persons as any
Party shall designate to the others for such purposes in the manner hereinabove
set forth.
5.2 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by Parties.
5.3 MERGER.
(A) 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.
(B) All prior agreements whether written or oral are merged herein and shall
be of no force or effect.
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5.4 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.
5.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than a conditions precedent, if any, 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 provision 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.
5.6 GOVERNING LAW AND VENUE.
This Agreement shall be construed in accordance with the laws of the
State of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in ▇▇▇▇▇▇ County, Florida.
5.7 DISPUTE RESOLUTION IN LIEU OF LITIGATION.
(A) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (a) First, the issue shall be submitted to mediation before
a mediation service in Palm Beach County, Florida to be
selected by lot from six alternatives to be provided, three
by Equity Growth and three by the Client.
(b) The mediation efforts shall be concluded within ten business days
after their initiation unless the Parties unanimously agree to an
extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit
the dispute to binding arbitration before an arbitration service
located in Palm Beach County, Florida, to be selected by lot, from
six alternatives to be provided, in the manner set forth above for
selection of a mediator;
(3) (A) Expenses of mediation shall be borne by the Parties
equally if successful but if unsuccessful, expenses of
mediation and of arbitration shall be borne by the Party or
Parties against whom the arbitration decision is rendered.
(B) If the terms of the arbitral award do not establish a prevailing
Party, then the expenses of unsuccessful mediation and arbitration
shall be borne 1/2 by the Client and 1/2 by Equity Growth.
(B) Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
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(C) 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.
5.8 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, jointly and severally, their successors,
assigns, personal representatives, estate, heirs and legatees.
5.9 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.
5.10 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.
5.11 FURTHER ASSURANCES.
The Parties hereby 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 of 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.
5.12 STATUS.
(A) Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship.
(B) Throughout the term of this Agreement, Equity Growth shall serve an
independent contractor, as that term is defined by the United States
Internal Revenue Service, and in conjunction therewith, shall be
responsible for all of his own tax reporting and payment obligations.
(C) In amplification of the foregoing, Equity Growth shall, subject to
reasonable reimbursement on a pre-approved budgetary basis, be
responsible for providing its own office facilities and supporting
personnel.
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5.13 COUNTERPARTS.
(A) This Agreement may be executed in any number of counterparts delivered
through facsimile transmission.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
5.14 LICENSE.
(A) (1) This Agreement is the property of The Yankee Companies, Inc.,
a Florida corporation which serves as a strategic consultant to
Equity Growth ("Yankees").
(2) The use hereof by the Parties is authorized hereby solely for
purposes of this transaction and, the use of this form of
agreement or of any derivation thereof without Yankees' prior
written permission is prohibited.
(3) This Agreement shall not be construed more stringently or
interpreted less favorably against Equity Growth based on
authorship.
(B) The Client hereby acknowledge that neither Yankees nor Equity Growth is a
law firm and that neither provided it with any advice, legal or
otherwise, in conjunction with this Agreement, but rather, has suggested
that it rely solely on its own experience and advisors in evaluating or
interpreting this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
GOLDEN JERSEY PRODUCTS, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, SECRETARY
{Seal}
EQUITY GROWTH SYSTEMS, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SECRETARY
{Seal}
37
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into by
and between SUNTEL COMMUNICATIONS GROUP, INC., a Delaware corporation (the
"Client") and EQUITY GROWTH SYSTEMS, INC., a publicly held Delaware corporation
with a class of equity securities registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act" and "Equity
Growth," respectively; the Client and Equity Growth being hereinafter
collectively referred to as the "Parties" and generically as a "Party").
PREAMBLE :
WHEREAS, Client is a recently organized corporation, acting as a holding
company for two wholly owned subsidiaries each heretofore engaged in
different aspects of the telecommunications industry as more particularly
described in the materials annexed hereto and made a part hereof as
composite exhibit 0.1; and
WHEREAS, the Client desires to become a reporting company under federal
securities laws with a publicly traded class of securities; and
WHEREAS, Equity Growth personnel have substantial experience with law,
accounting and the regulatory obligations imposed under federal
securities laws and regulations, and provide assistance to companies that
desire to attain reporting status under Section 12(g) of the Exchange
Act; and; and
WHEREAS, the Client desires to induce Equity Growth to make
its services available to the Client; and
WHEREAS, Equity Growth is agreeable to making its services available to
the Client, on the terms and subject to the conditions hereinafter set
forth:
NOW, THEREFORE, in consideration for Equity Growth's agreement to render
the hereinafter described services as well as of the premises, the sum of
TEN ($10) DOLLARS, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Parties, intending to
be legally bound, hereby agree as follows:
WITNESSETH:
ARTICLE ONE
OBLIGATIONS OF THE PARTIES
1.1 DESCRIPTION OF SERVICES
(A) Equity Growth will assist the Client's legal counsel, or, as
set forth below, make available Equity Growth's own legal
counsel (at the Client's expense), to register the Client's
securities with the Securities and Exchange Commission (the
"SEC"), and thereafter, will assist the Client to make
arrangements required to permit trading of the Client's
securities on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc. (the "NASD"),
including introductions to one or more potential market
makers and assistance in the preparation, filing and
management of the SEC and NASD Rule 15c2-11 compliance
filings which will be required by any broker dealers
publishing quotes in the Client's securities.
38
(B) Equity Growth will assist the Client to obtain a CUSIP number for its
securities, to obtain a stock trading symbol and to list the Client in a
Standard & Poors or comparable securities manual complying with the
manual exemption from Blue Sky registration in 15 or more states.
(C) Because of the Client's anticipated status under federal
securities laws, in any circumstances where Equity Growth is
describing the securities of to a third Party, Equity Growth
shall disclose to such person the compensation received from
the Client to the extent required under any applicable laws,
including, without limitation, Section 17(b) of the
Securities Act of 1933, as amended (the "Securities Act");
however, the Parties acknowledge they do not contemplate that
Equity Growth shall be involved in any activities on behalf
of the Client requiring such descriptions or disclosures, or
that the Services involve any activities subject to
regulation under federal or state securities laws, except for
the introduction of the Client and its principals to
licensed broker dealers in securities, securities analysts
and appropriate corporate information and stockholder
relations specialists.
1.2 FIDUCIARY OBLIGATION TO CLIENT
In rendering its services, Equity Growth shall not disclose to any third
party any confidential non-public information furnished by the Client or
otherwise obtained by it with respect to the Client.
1.3 LIMITATIONS ON SERVICES
(A) The Parties recognize that certain responsibilities and
obligations are imposed by federal and state securities laws
and by the applicable rules and regulations of stock
exchanges, the National Association of Securities Dealers,
Inc. (collectively with its subsidiaries being hereinafter
referred to as the "NASD"), in-house "due diligence" or
"compliance" departments of licensed securities firms, etc.;
accordingly, Equity Growth agrees that it will not release
any information or data about the Client to any selected or
limited person(s), entity, or group if Equity Growth is aware
that such information or data has not been generally released
or promulgated.
(B) Equity Growth shall restrict or cease, as directed by the Client, all
efforts on behalf of the Client, including all dissemination of
information regarding the Client, immediately upon receipt of
instructions (in writing by fax or letter) to that effect from the
Client.
1.4 EQUITY GROWTH'S COMPENSATION
(A) (1) The Client shall issue, directly to Equity Growth's
stockholders of record on the 30th day following the
date of this agreement, pro rata based on their
ownership of common stock in Equity Growth, a quantity
of the Client's common stock equal to 10% of the total
outstanding capital stock of the Client, immediately
following such issuance, subject to anti-dilutive
rights for a period of 12 months following the
original date of issuance (the "Public Shares").
39
(2) The Public Shares shall be issued either:
(a) in reliance on either Rule 504 of SEC Regulation D or Section 4(6)
of the Securities Act, and comparable provisions of the securities
laws in each of the recipient's state of domicile, or
(b) pursuant to a registration on SEC Form SB-1 or SB-2, or a
notification statement pursuant to SEC Regulation A;
and Equity Growth will assist the Client to prepare and file
required documentation associated therewith, at the Client's
expense.
(3) Prior to the issuance of the Public Shares Equity Growth will
assist the Client to comply with any obligations under SEC Rule
10b-17 pertaining to dividends.
(4) The Parties hereby agree that for auditing, tax, Rule 504 or SEC
filing fee purposes, the reasonable market value of the Public
Shares is the lesser of $50,000 or 10% of the Client's
stockholders equity.
(B) (1) In the event that the Client desires to avail itself
of the legal services of Equity Growth's general
counsel to prepare and file the required SEC
registration statements, it will pay Equity Growth the
sum of $15,000, plus out of pocket costs and expenses,
provided that not more than four amendments thereto
are required, and that the Client provides timely and
complete assistance in responding to SEC comment
letters (additional costs resulting from failure of
such assumptions being billed at such counsel's normal
hourly fees for securities related filings).
(2) Equity Growth believes that the Client will have to pay the
following additional costs in conjunction with the projects
contemplated by this Agreement:
M. Auditing costs, the amount of which the Client is not
competent to determine;
N. The costs of obtaining a CUSIP number and listing with Standard &
Poors or another comparable manual, which is estimated to be
$4,000;
O. Transfer agent set up and certificate distribution
costs which will vary, based on the agency selected
and the initial services required, but should not
exceed $15,000 for physical delivery of certificates
to each stockholder, assuming that such delivery can
be structured over several months. In the event that
book entry recording in lieu of physical delivery is a
legally available alternative and the costs of
certificates are born by stockholders requesting them,
then the costs can be cut dramatically (in the $5,000
range);
P. Filing fees to the SEC and State regulatory authorities, not
expected to exceed $5,000;
Q. Travel, long distance telephone, overnight postage and mailing
expenses, not expected to exceed $2,500.
40
(C) In addition to the compensation described above with reference to
services during the Initial Term of this Agreement and whether or not the
following services are rendered during such Initial Term:
(1) In the event that Equity Growth arranges or provides funding for
Client on terms more beneficial than those reflected in Client's
current principal financing agreements, Equity Growth shall be
entitled, at its election, to either:
(a) A fee equal to 25% of such savings, on a continuing
basis; or
(b) If equity funding is provided though Equity Growth or
any affiliates thereof, a discount of 10% from the bid
price for the subject equity securities, if they are
issuable as free trading securities, or, a discount of
50% from the bid price for the subject equity
securities, if they are issuable as restricted
securities (as the term restricted is used for
purposes of SEC Rule 144); or
(b) If funding is provided by any person or group of
persons introduced to the Client by Equity Growth or
persons associated with Equity Growth, directly or
indirectly, but is not provided by Equity Growth or
its principals as described in the preceding sub
section, then Equity Growth shall be entitled to an
introduction fee equal to 5% of the aggregate proceeds
so obtained; and
(2) In the event that Equity Growth generates business for the Client,
then, on any sales resulting therefrom, Equity Growth shall be
entitled to a commission equal to 10% of the gross income derived
by the Client therefrom, on a continuing basis.
(3) In the event that Equity Growth or any affiliate thereof arranges
for an acquisition by the Client, then Equity Growth shall be
entitled to compensation equal to 10% of the compensation paid for
such acquisition, in addition to any compensation negotiated and
received from the acquired entity or its affiliates.
(D) The Client will assure that its legal counsel promptly
prepares all reports which then existing holders of the
Client's securities (including Equity Growth, its affiliates
and successors in interest) are required to file with the
Securities and Exchange Commission as a result of the
Client's reporting status, including Securities and Exchange
Commission Forms 3, 4 and 5, Schedules 13(d) and Schedules
13(g), and shall submit all such reports to the subject
stockholders for prompt execution and timely filing with the
Securities and Exchange Commission.
(E) (1) In addition to payment of fees, the Client will be responsible
for payment of all costs and disbursements associated with Equity
Growth's services either:
(a) Involving less than $50 per item and $200 in the aggregate during
the preceding 30 day period; or
(b) Reflected in an operating budget approved by the
Client; or
(c) Approved in writing by the Client; provided, however, that the
refusal by the Client to approve expenditures required for the
proper performance of Equity Growth's services will excuse
performance of such services.
(2) All of Equity Growth's statements will be paid within 10 days
after receipt.
(3) In the event additional time for payment is required, Equity
Growth will have the option of selling the account receivable and
the Client agrees to pay interest thereon at the monthly rate of
1%.
41
(4) In the event collection activities are required, the Client agrees
to pay all of Equity Growth's out of pocket costs associated
therewith.
(5) There will be no change or waiver of the provisions contained
herein, unless such charge is in writing and signed by the Client
and Equity Growth.
1.5 CLIENT'S COMMITMENTS
(A). (1) All work requiring legal review will be submitted for
approval by the Client to the Client's legal counsel
prior to its use.
(2) Final drafts of any matters prepared for use by Equity Growth in
conjunction with the provision of the Services will be reviewed by
the Client and, if legally required, by the Client's legal
counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
(2) Only after such review and approval by the Client and, if
required, the Client's legal counsel, will any documents be filed
with regulatory agencies or provided to Equity Growth or third
parties.
(3) (a) Financial data will be reviewed by competent,
independent, certified public accountants experienced and
qualified in securities related accounting, to be
separately retained by the Client.
(b) Such accountants will be required to review and approve all
financially related filings, prior to release to Equity Growth,
other third parties or submission to the appropriate regulatory
authorities.
(B) (1) The Client shall supply Equity Growth on a regular and
timely basis with all approved data and information
about the Client, its management, its products, and
its operations and the Client shall be responsible for
advising Equity Growth of any fact which would affect
the accuracy of any prior data and information
supplied to Equity Growth.
(2) The Client shall use its best efforts to promptly supply Equity
Growth with full and complete copies of all filings with all
federal and state securities agencies; with full and complete
copies of all shareholder reports and communications whether or
not prepared with Equity Growth's assistance, with all data and
information supplied to any analyst, broker-dealer, market maker,
or other member of the financial community; and with all
product/services brochures, sales materials, etc.
(3) The Client shall promptly notify Equity Growth of the filing of
any registration statement for the sale of securities and/or of
any other event which triggers any restrictions on publicity.
(4) The Client shall be deemed to make a continuing representation of
the accuracy of any and all material facts, material, information,
and data which it supplies to Equity Growth and the Client
acknowledges its awareness that Equity Growth will rely on such
continuing representation in performing its functions under this
Agreement.
(5) Equity Growth, in the absence of notice in writing from the
Client, may rely on the continuing accuracy of material,
information and data supplied by the Client.
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ARTICLE TWO
TERM, RENEWALS & EARLIER TERMINATION
2.1 TERM.
This Agreement shall be for an initial term of 180 days, commencing on
the date of its complete execution by all Parties, as evinced in the execution
page hereof, but shall be extended, as required to permit completion of the
projects contemplated hereby (attaining trading status for the Client's
securities as an issuer filing reports with the SEC pursuant to Section 12[g] of
the Exchange Act (the "Initial Term").
2.2 RENEWALS.
Subject to prior agreement as to additional compensation payable to
Equity Growth, this Agreement shall be renewed automatically, after expiration
of the original term, on a continuing annual basis, unless the Party wishing not
to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
2.3 FINAL SETTLEMENT.
(A) Upon termination of this Agreement and payment to Equity
Growth of all amounts due it hereunder, Equity Growth or its
representative shall execute and deliver to the Client a
receipt for such sums and a release of all claims, except
such claims as may have been submitted pursuant to the terms
of this Agreement and which remain unpaid, and, shall
forthwith tender to the Client all records, manuals and
written procedures, as may be desired by the Client for the
continued conduct of its business; and
(B) The Client or its representative shall execute and deliver to
Equity Growth a receipt for all materials returned and a
release of all claims, except such claims as may have been
submitted pursuant to the terms of this Agreement and which
remain unpaid, and, shall forthwith tender to Equity Growth
all records, manuals and written procedures, as may be
desired by Equity Growth for the continued conduct of its
business.
ARTICLE THREE
EQUITY GROWTH'S CONFIDENTIALITY & COMPETITION COVENANTS
3.1 GENERAL PROVISIONS.
(A) Equity Growth acknowledges that, in and as a result of its
entry into this Agreement, it will be making use of
confidential information of special and unique nature and
value relating to such matters as the Client's trade secrets,
systems, procedures, manuals, confidential reports;
consequently, as material inducement to the entry into this
Agreement by the Client, Equity Growth hereby covenants and
agrees that it shall not, at anytime during the term of this
Agreement, any renewals thereof and for two years following
the terms of this Agreement, directly or indirectly, use,
divulge or disclose, for any purpose whatsoever, any of such
confidential information which has been obtained by or
disclosed to it as a result of its entry into this Agreement
or provision of services hereunder.
(B) In the event of a breach or threatened breach by Equity
Growth of any of the provisions of this Article Three, the
Client, in addition to and not in limitation of any other
rights, remedies or damages available to the Client, whether
at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach
by Equity Growth, or by its partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
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3.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to the Client and its clients as a result of a breach by Equity Growth of the
covenants or agreements contained in this Article Three, and in view of the lack
of an adequate remedy at law to protect the Client's interests, Equity Growth
hereby covenants and agrees that the Client shall have the following additional
rights and remedies in the event of a breach hereof:
(A) Equity Growth hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Three; and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which the Client or its clients may sustain prior
to the effective enforcement of such injunction, Equity Growth hereby
covenants and agrees to pay over to the Client, in the event it violates
the covenants and agreements contained in this Article Three, the greater
of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by the Client or its clients as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to the Client for any
breach of the covenants and agreements contained in this Article
Three, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect the Client
and its clients from the injury caused by such breaches would be
injunctive relief.
3.3 CUMULATIVE REMEDIES.
Equity Growth hereby irrevocably agrees that the remedies described in
this Article Three shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Client and its clients are or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
3.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) Equity Growth hereby represents, warrants and acknowledges
that its members or officers and directors have carefully
read and considered the provisions of this Article Three and,
having done so, agrees that the restrictions set forth herein
are fair and reasonable and are reasonably required for the
protection of the interests of the Client, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, Equity Growth hereby covenants,
agrees and directs such court to substitute a reasonable
judicially enforceable limitation in place of any limitation
deemed unenforceable and, Equity Growth hereby covenants and
agrees that if so modified, the covenants contained in this
Article Three shall be as fully enforceable as if they had
been set forth herein directly by the Parties.
(B) In determining the nature of this limitation, Equity Growth hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute arising hereunder recognize that the
Parties desire that these covenants not to compete or circumvent be
imposed and maintained to the greatest extent possible.
3.5 EXCLUSIVITY.
Equity Growth shall not be required to devote all of its business time to
the affairs of the Client, rather it shall devote such time as it is reasonably
necessary in light of its other business commitments.
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ARTICLE FOUR
CLIENT'S CONFIDENTIALITY & COMPETITION COVENANTS
4.1 GENERAL PROHIBITIONS
(A) The Client acknowledges that, in and as a result of its
engagement of Equity Growth, the Client will be making use of
confidential information of special and unique nature and
value relating to such matters as Equity Growth's business
contacts, professional advisors, trade secrets, systems,
procedures, manuals, confidential reports, lists of clients,
potential customers and funders; consequently, as material
inducement to the entry into this Agreement by Equity Growth,
the Client hereby covenants and agrees that it shall not, at
anytime during the term of this Agreement, any renewals
thereof an for two years following the terms of this
Agreement, directly or indirectly, use, divulge or disclose,
for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to it as
a result of its employment of Equity Growth, or Equity
Growth's affiliates.
(B) In the event of a breach or threatened breach by the Client
of any of the provisions of this Article Four, Equity Growth,
in addition to and not in limitation of any other rights,
remedies or damages available to Equity Growth, whether at
law or in equity, shall be entitled to a permanent injunction
in order to prevent or to restrain any such breach by the
Client, or by the Client's partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
4.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to Equity Growth as a result of a breach by the Client of the covenants or
agreements contained in this Article Four, and in view of the lack of an
adequate remedy at law to protect Equity Growth's interests, the Client hereby
covenants and agrees that Equity Growth shall have the following additional
rights and remedies in the event of a breach hereof:
(A) The Client hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Four is and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which Equity Growth may sustain prior to the
effective enforcement of such injunction, the Client hereby covenants and
agrees to pay over to Equity Growth, in the event it violates the
covenants and agreements contained in this Article Four, the greater of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by Equity Growth as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the
exclusive remedy available to Equity Growth for any breach of the
covenants and agreements contained in this Article Four, prior to
the issuance of such injunction, the Parties recognizing that the
only adequate remedy to protect Equity Growth from the injury
caused by such breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
The Client hereby irrevocably agrees that the remedies described in this
Article Four shall be in addition to, and not in limitation of, any of the
rights or remedies to which Equity Growth is or may be entitled to, whether at
law or in equity, under or pursuant to this Agreement.
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4.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) The Client hereby represents, warrants and acknowledges that
its officers and directors have carefully read and
considered the provisions of this Article Four and, having
done so, agree that the restrictions set forth herein are
fair and reasonable and are reasonably required for the
protection of the interests of Equity Growth, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, the Client hereby covenants, agrees
and directs such court to substitute a reasonable judicially
enforceable limitation in place of any limitation deemed
unenforceable and, the Client hereby covenants and agrees
that if so modified, the covenants contained in this Article
Four shall be as fully enforceable as if they had been set
forth herein directly by the Parties.
(B) In determining the nature of this limitation, the Client hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute hereunder recognize that the Parties
desire that these covenants not to compete or circumvent be imposed and
maintained to the greatest extent possible.
ARTICLE FIVE
MISCELLANEOUS
5.1 NOTICES.
All notices, demands or other written communications hereunder shall be
in writing, and unless otherwise provided, shall be deemed to have been duly
given on the first business day after mailing by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
TO EQUITY GROWTH:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Telephone (941)
▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with copies to
THE YANKEE COMPANIES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
and
THE YANKEE COMPANIES, INC.1941 Southeast 51st
Terrace; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Administrative Officer
TO THE CLIENT:
SUNTEL COMMUNICATIONS GROUP, INC.
Post Office Box 49750; ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (407) ___-____; Fax (407) ___-____; and, e-mail
-------@---.---
or at such address, telephone and fax numbers
as are reflected on the SEC's ▇▇▇▇▇ Internet site;
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President & Chief Executive Officer
in each case, with copies to such other address or to such other persons as any
Party shall designate to the others for such purposes in the manner hereinabove
set forth.
5.2 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by Parties.
5.3 MERGER.
(A) 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.
(B) All prior agreements whether written or oral are merged herein and shall
be of no force or effect.
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5.4 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.
5.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than a conditions precedent, if any, 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 provision 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.
5.6 GOVERNING LAW AND VENUE.
This Agreement shall be construed in accordance with the laws of the
State of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in ▇▇▇▇▇▇ County, Florida.
5.7 DISPUTE RESOLUTION IN LIEU OF LITIGATION.
(A) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (a) First, the issue shall be submitted to mediation before
a mediation service in Palm Beach County, Florida to be
selected by lot from six alternatives to be provided, three
by Equity Growth and three by the Client.
(b) The mediation efforts shall be concluded within ten business days
after their initiation unless the Parties unanimously agree to an
extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit
the dispute to binding arbitration before an arbitration service
located in Palm Beach County, Florida, to be selected by lot, from
six alternatives to be provided, in the manner set forth above for
selection of a mediator;
(3) (A) Expenses of mediation shall be borne by the Parties
equally if successful but if unsuccessful, expenses of
mediation and of arbitration shall be borne by the Party or
Parties against whom the arbitration decision is rendered.
(B) If the terms of the arbitral award do not establish a prevailing
Party, then the expenses of unsuccessful mediation and arbitration
shall be borne 1/2 by the Client and 1/2 by Equity Growth.
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(B) Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
(C) 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.
5.8 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, jointly and severally, their successors,
assigns, personal representatives, estate, heirs and legatees.
5.9 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.
5.10 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.
5.11 FURTHER ASSURANCES.
The Parties hereby 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 of 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.
5.12 STATUS.
(A) Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship.
(B) Throughout the term of this Agreement, Equity Growth shall serve an
independent contractor, as that term is defined by the United States
Internal Revenue Service, and in conjunction therewith, shall be
responsible for all of his own tax reporting and payment obligations.
(C) In amplification of the foregoing, Equity Growth shall, subject to
reasonable reimbursement on a pre-approved budgetary basis, be
responsible for providing its own office facilities and supporting
personnel.
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5.13 COUNTERPARTS.
(A) This Agreement may be executed in any number of counterparts delivered
through facsimile transmission.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
5.14 LICENSE.
(A) (1) This Agreement is the property of The Yankee Companies, Inc.,
a Florida corporation which serves as a strategic consultant to
Equity Growth ("Yankees").
(2) The use hereof by the Parties is authorized hereby solely for
purposes of this transaction and, the use of this form of
agreement or of any derivation thereof without Yankees' prior
written permission is prohibited.
(3) This Agreement shall not be construed more stringently or
interpreted less favorably against Equity Growth based on
authorship.
(B) The Client hereby acknowledge that neither Yankees nor Equity Growth is a
law firm and that neither provided it with any advice, legal or
otherwise, in conjunction with this Agreement, but rather, has suggested
that it rely solely on its own experience and advisors in evaluating or
interpreting this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
SUNTEL COMMUNICATIONS GROUP, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
____________________, SECRETARY
{Seal}
EQUITY GROWTH SYSTEMS, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SECRETARY
{Seal}
50
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into by
and between SPORTS COLLECTIBLES EXCHANGE, INC., a Florida corporation (the
"Client") and EQUITY GROWTH SYSTEMS, INC., a publicly held Delaware corporation
with a class of equity securities registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act" and "Equity
Growth," respectively; the Client and Equity Growth being hereinafter
collectively referred to as the "Parties" and generically as a "Party").
PREAMBLE :
WHEREAS, Client is engaged in the sports collectible business which it
intends to expand into the following areas: Internet collectibles
trading; certification program for sports collectible appraisers; a minor
league baseball hall of fame; and, development and maintenance of sports
collectibles price guides, all, initially concentrating on minor league
baseball ; and
WHEREAS, the Client desires to become a reporting company under federal
securities laws with a publicly traded class of securities; and
WHEREAS, Equity Growth personnel have substantial experience with law,
accounting and the regulatory obligations imposed under federal
securities laws and regulations, and provide assistance to companies that
desire to attain reporting status under Section 12(g) of the Exchange
Act; and
WHEREAS, Equity Growth is agreeable to making its services available to
the Client, on the terms and subject to the conditions hereinafter set
forth:
NOW, THEREFORE, in consideration for Equity Growth's agreement to render
the hereinafter described services as well as of the premises, the sum of
TEN ($10) DOLLARS, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Parties, intending to
be legally bound, hereby agree as follows:
WITNESSETH:
ARTICLE ONE
OBLIGATIONS OF THE PARTIES
1.1 DESCRIPTION OF SERVICES
(A) Equity Growth will assist the Client's legal counsel, or, as
set forth below, provide its own legal counsel, to register
its securities with the Securities and Exchange Commission
(the "SEC"), and thereafter, will assist the Client to make
arrangements required to permit trading of the Client's
securities on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc., including
introductions to one or more potential market makers and
assistance in the preparation, filing and management of the
SEC and NASD Rule 15c2-11 compliance filings which will be
required by any broker dealers publishing quotes in the
Client's securities.
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(B) Equity Growth will assist the Client to obtain a CUSIP number for its
securities, to obtain a stock trading symbol and to list the Client in a
Standard & Poors or comparable securities manual complying with the
manual exemption from Blue Sky registration in 15 or more states.
(C) Because of the Client's anticipated status under federal
securities laws, in any circumstances where Equity Growth is
describing the securities of to a third Party, Equity Growth
shall disclose to such person the compensation received from
the Client to the extent required under any applicable laws,
including, without limitation, Section 17(b) of the
Securities Act of 1933, as amended (the "Securities Act");
however, the Parties acknowledge they do not contemplate that
Equity Growth shall be involved in any activities on behalf
of The Client requiring such descriptions or disclosures, or
that the Services involve any activities subject to
regulation under federal or state securities laws, except for
the introduction of the Client and its principals to
licensed broker dealers in securities, securities analysts
and appropriate corporate information and stockholder
relations specialists.
1.2 FIDUCIARY OBLIGATION TO CLIENT
In rendering its services, Equity Growth shall not disclose to any third
party any confidential non-public information furnished by the Client or
otherwise obtained by it with respect to the Client.
1.3 LIMITATIONS ON SERVICES
(A) The Parties recognize that certain responsibilities and
obligations are imposed by federal and state securities laws
and by the applicable rules and regulations of stock
exchanges, the National Association of Securities Dealers,
Inc. (collectively with its subsidiaries being hereinafter
referred to as the "NASD"), in-house "due diligence" or
"compliance" departments of licensed securities firms, etc.;
accordingly, Equity Growth agrees that it will not release
any information or data about the Client to any selected or
limited person(s), entity, or group if Equity Growth is aware
that such information or data has not been generally released
or promulgated.
(B) Equity Growth shall restrict or cease, as directed by the Client, all
efforts on behalf of the Client, including all dissemination of
information regarding the Client, immediately upon receipt of
instructions (in writing by fax or letter) to that effect from the
Client.
1.4 EQUITY GROWTH'S COMPENSATION
(A) (1) The Client shall issue, directly to Equity Growth's
stockholders of record on the 30th day following the
date of this agreement, pro rata based on their
ownership of common stock in Equity Growth, a quantity
of the Client's common stock equal to 15% of the total
outstanding capital stock of the Client, immediately
following such issuance, subject to anti-dilutive
rights for a period of 12 months following the
original date of issuance (the "Public Shares").
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(2) The Public Shares shall be issued either:
(a) in reliance on either Rule 504 of SEC Regulation D or Section 4(6)
of the Securities Act, and comparable provisions of the securities
laws in each of the recipient's state of domicile, or
(b) pursuant to a registration on SEC Form SB-1 or SB-2, or a
notification statement pursuant to SEC Regulation A;
and Equity Growth will assist the Client to prepare and file
required documentation associated therewith, at the Client's
expense.
(3) Prior to the issuance of the Public Shares Equity Growth will
assist the Client to comply with any obligations under SEC Rule
10b-17 pertaining to dividends.
(4) The Parties hereby agree that for auditing, tax, Rule 504 or SEC
filing fee purposes, the reasonable market value of the Public
Shares is the greater of $15,000 or 15% of the Client's
stockholders equity.
(B) (1) In the event that the Client desires to avail itself
of the legal services of Equity Growth's general
counsel to prepare and file the required SEC
registration statements, it will pay Equity Growth the
sum of $15,000, plus out of pocket costs and expenses,
provided that not more than four amendments thereto
are required, and that the Client provides timely and
complete assistance in responding to SEC comment
letters (additional costs resulting from failure of
such assumptions being billed at such counsel's normal
hourly fees for securities related filings).
(2) Equity Growth believes that the Client will have to pay the
following additional costs in conjunction with the projects
contemplated by this Agreement:
R. Auditing costs, the amount of which the Client is not
competent to determine;
S. The costs of obtaining a CUSIP number and listing with Standard &
Poors or another comparable manual, which is estimated to be
$4,000;
T. Transfer agent set up and certificate distribution
costs which will vary, based on the agency selected
and the initial services required, but should not
exceed $15,000 for physical delivery of certificates
to each stockholder, assuming that such delivery can
be structured over several months. In the event that
book entry recording in lieu of physical delivery is a
legally available alternative and the costs of
certificates are born by stockholders requesting them,
then the costs can be cut dramatically (in the $5,000
range);
53
U. Filing fees to the SEC and State regulatory authorities, not
expected to exceed $5,000;
V. Travel, long distance telephone, overnight postage and mailing
expenses, not expected to exceed $2,500.
(C) In addition to the compensation described above with reference to
services during the Initial Term of this Agreement and whether or not the
following services are rendered during such Initial Term:
(1) In the event that Equity Growth arranges or provides funding for
Client on terms more beneficial than those reflected in Client's
current principal financing agreements, Equity Growth shall be
entitled, at its election, to either:
(a) A fee equal to 25% of such savings, on a continuing
basis; or
(b) If equity funding is provided though Equity Growth or
any affiliates thereof, a discount of 10% from the bid
price for the subject equity securities, if they are
issuable as free trading securities, or, a discount of
50% from the bid price for the subject equity
securities, if they are issuable as restricted
securities (as the term restricted is used for
purposes of SEC Rule 144); or
(b) If funding is provided by any person or group of
persons introduced to the Client by Equity Growth or
persons associated with Equity Growth, directly or
indirectly, but is not provided by Equity Growth or
its principals as described in the preceding sub
section, then Equity Growth shall be entitled to an
introduction fee equal to 5% of the aggregate proceeds
so obtained; and
(2) In the event that Equity Growth generates business for the Client,
then, on any sales resulting therefrom, Equity Growth shall be
entitled to a commission equal to 10% of the gross income derived
by the Client therefrom, on a continuing basis.
(3) In the event that Equity Growth or any affiliate thereof arranges
for an acquisition by the Client, then Equity Growth shall be
entitled to compensation equal to 10% of the compensation paid for
such acquisition, in addition to any compensation negotiated and
received from the acquired entity or its affiliates.
(D) The Client will assure that its legal counsel promptly
prepares all reports which then existing holders of the
Client's securities (including Equity Growth, its affiliates
and successors in interest) are required to file with the
Securities and Exchange Commission as a result of the
Client's reporting status, including Securities and Exchange
Commission Forms 3, 4 and 5, Schedules 13(d) and Schedules
13(g), and shall submit all such reports to the subject
stockholders for prompt execution and timely filing with the
Securities and Exchange Commission.
(E) (1) In addition to payment of fees, the Client will be responsible
for payment of all costs and disbursements associated with Equity
Growth's services either:
(a) Involving less than $50 per item and $200 in the aggregate during
the preceding 30 day period; or
(b) Reflected in an operating budget approved by the
Client; or
(c) Approved in writing by the Client; provided, however, that the
refusal by the Client to approve expenditures required for the
proper performance of Equity Growth's services will excuse
performance of such services.
54
(2) All of Equity Growth's statements will be paid within 10 days
after receipt.
(3) In the event additional time for payment is required, Equity
Growth will have the option of selling the account receivable and
the Client agrees to pay interest thereon at the monthly rate of
1%.
(4) In the event collection activities are required, the Client agrees
to pay all of Equity Growth's out of pocket costs associated
therewith.
(5) There will be no change or waiver of the provisions contained
herein, unless such charge is in writing and signed by the Client
and Equity Growth.
1.5 CLIENT'S COMMITMENTS
(A). (1) All work requiring legal review will be submitted for
approval by the Client to the Client's legal counsel
prior to its use.
(2) Final drafts of any matters prepared for use by Equity Growth in
conjunction with the provision of the Services will be reviewed by
the Client and, if legally required, by the Client's legal
counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
(2) Only after such review and approval by the Client and, if
required, the Client's legal counsel, will any documents be filed
with regulatory agencies or provided to Equity Growth or third
parties.
(3) (a) Financial data will be reviewed by competent,
independent, certified public accountants experienced and
qualified in securities related accounting, to be
separately retained by the Client.
(b) Such accountants will be required to review and approve all
financially related filings, prior to release to Equity Growth,
other third parties or submission to the appropriate regulatory
authorities.
(B) (1) The Client shall supply Equity Growth on a regular and
timely basis with all approved data and information
about the Client, its management, its products, and
its operations and the Client shall be responsible for
advising Equity Growth of any fact which would affect
the accuracy of any prior data and information
supplied to Equity Growth.
(2) The Client shall use its best efforts to promptly supply Equity
Growth with full and complete copies of all filings with all
federal and state securities agencies; with full and complete
copies of all shareholder reports and communications whether or
not prepared with Equity Growth's assistance, with all data and
information supplied to any analyst, broker-dealer, market maker,
or other member of the financial community; and with all
product/services brochures, sales materials, etc.
55
(3) The Client shall promptly notify Equity Growth of the filing of
any registration statement for the sale of securities and/or of
any other event which triggers any restrictions on publicity.
(4) The Client shall be deemed to make a continuing representation of
the accuracy of any and all material facts, material, information,
and data which it supplies to Equity Growth and the Client
acknowledges its awareness that Equity Growth will rely on such
continuing representation in performing its functions under this
Agreement.
(5) Equity Growth, in the absence of notice in writing from the
Client, may rely on the continuing accuracy of material,
information and data supplied by the Client.
ARTICLE TWO
TERM, RENEWALS & EARLIER TERMINATION
2.1 TERM.
This Agreement shall be for an initial term of 180 days, commencing on
the date of its complete execution by all Parties, as evinced in the execution
page hereof, but shall be extended, as required to permit completion of the
projects contemplated hereby (attaining trading status for the Client's
securities as an issuer filing reports with the SEC pursuant to Section 12[g] of
the Exchange Act (the "Initial Term").
2.2 RENEWALS.
Subject to prior agreement as to additional compensation payable to
Equity Growth, this Agreement shall be renewed automatically, after expiration
of the original term, on a continuing annual basis, unless the Party wishing not
to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
2.3 FINAL SETTLEMENT.
(A) Upon termination of this Agreement and payment to Equity
Growth of all amounts due it hereunder, Equity Growth or its
representative shall execute and deliver to the Client a
receipt for such sums and a release of all claims, except
such claims as may have been submitted pursuant to the terms
of this Agreement and which remain unpaid, and, shall
forthwith tender to the Client all records, manuals and
written procedures, as may be desired by the Client for the
continued conduct of its business; and
(B) The Client or its representative shall execute and deliver to
Equity Growth a receipt for all materials returned and a
release of all claims, except such claims as may have been
submitted pursuant to the terms of this Agreement and which
remain unpaid, and, shall forthwith tender to Equity Growth
all records, manuals and written procedures, as may be
desired by Equity Growth for the continued conduct of its
business.
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ARTICLE THREE
EQUITY GROWTH'S CONFIDENTIALITY & COMPETITION COVENANTS
3.1 GENERAL PROVISIONS.
(A) Equity Growth acknowledges that, in and as a result of its
entry into this Agreement, it will be making use of
confidential information of special and unique nature and
value relating to such matters as the Client's trade secrets,
systems, procedures, manuals, confidential reports;
consequently, as material inducement to the entry into this
Agreement by the Client, Equity Growth hereby covenants and
agrees that it shall not, at anytime during the term of this
Agreement, any renewals thereof and for two years following
the terms of this Agreement, directly or indirectly, use,
divulge or disclose, for any purpose whatsoever, any of such
confidential information which has been obtained by or
disclosed to it as a result of its entry into this Agreement
or provision of services hereunder.
(B) In the event of a breach or threatened breach by Equity
Growth of any of the provisions of this Article Three, the
Client, in addition to and not in limitation of any other
rights, remedies or damages available to the Client, whether
at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach
by Equity Growth, or by its partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
3.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to the Client and its clients as a result of a breach by Equity Growth of the
covenants or agreements contained in this Article Three, and in view of the lack
of an adequate remedy at law to protect the Client's interests, Equity Growth
hereby covenants and agrees that the Client shall have the following additional
rights and remedies in the event of a breach hereof:
(A) Equity Growth hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Three; and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which the Client or its clients may sustain prior
to the effective enforcement of such injunction, Equity Growth hereby
covenants and agrees to pay over to the Client, in the event it violates
the covenants and agreements contained in this Article Three, the greater
of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by the Client or its clients as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to the Client for any
breach of the covenants and agreements contained in this Article
Three, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect the Client
and its clients from the injury caused by such breaches would be
injunctive relief.
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3.3 CUMULATIVE REMEDIES.
Equity Growth hereby irrevocably agrees that the remedies described in
this Article Three shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Client and its clients are or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
3.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) Equity Growth hereby represents, warrants and acknowledges
that its members or officers and directors have carefully
read and considered the provisions of this Article Three and,
having done so, agrees that the restrictions set forth herein
are fair and reasonable and are reasonably required for the
protection of the interests of the Client, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, Equity Growth hereby covenants,
agrees and directs such court to substitute a reasonable
judicially enforceable limitation in place of any limitation
deemed unenforceable and, Equity Growth hereby covenants and
agrees that if so modified, the covenants contained in this
Article Three shall be as fully enforceable as if they had
been set forth herein directly by the Parties.
(B) In determining the nature of this limitation, Equity Growth hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute arising hereunder recognize that the
Parties desire that these covenants not to compete or circumvent be
imposed and maintained to the greatest extent possible.
3.5 EXCLUSIVITY.
Equity Growth shall not be required to devote all of its business time to
the affairs of the Client, rather it shall devote such time as it is reasonably
necessary in light of its other business commitments.
ARTICLE FOUR
CLIENT'S CONFIDENTIALITY & COMPETITION COVENANTS
4.1 GENERAL PROHIBITIONS
(A) The Client acknowledges that, in and as a result of its
engagement of Equity Growth, the Client will be making use of
confidential information of special and unique nature and
value relating to such matters as Equity Growth's business
contacts, professional advisors, trade secrets, systems,
procedures, manuals, confidential reports, lists of clients,
potential customers and funders; consequently, as material
inducement to the entry into this Agreement by Equity Growth,
the Client hereby covenants and agrees that it shall not, at
anytime during the term of this Agreement, any renewals
thereof an for two years following the terms of this
Agreement, directly or indirectly, use, divulge or disclose,
for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to it as
a result of its employment of Equity Growth, or Equity
Growth's affiliates.
(B) In the event of a breach or threatened breach by the Client
of any of the provisions of this Article Four, Equity Growth,
in addition to and not in limitation of any other rights,
remedies or damages available to Equity Growth, whether at
law or in equity, shall be entitled to a permanent injunction
in order to prevent or to restrain any such breach by the
Client, or by the Client's partners, directors, officers,
stockholders, agents, representatives, servants, employers,
employees, affiliates and/or any and all persons directly or
indirectly acting for or with it.
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4.2 SPECIAL REMEDIES.
In view of the irreparable harm and damage which would undoubtedly occur
to Equity Growth as a result of a breach by the Client of the covenants or
agreements contained in this Article Four, and in view of the lack of an
adequate remedy at law to protect Equity Growth's interests, the Client hereby
covenants and agrees that Equity Growth shall have the following additional
rights and remedies in the event of a breach hereof:
(A) The Client hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this
Article Four is and
(B) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which Equity Growth may sustain prior to the
effective enforcement of such injunction, the Client hereby covenants and
agrees to pay over to Equity Growth, in the event it violates the
covenants and agreements contained in this Article Four, the greater of:
(1) Any payment or compensation of any kind received by it because of
such violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered
by Equity Growth as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the
exclusive remedy available to Equity Growth for any breach of the
covenants and agreements contained in this Article Four, prior to
the issuance of such injunction, the Parties recognizing that the
only adequate remedy to protect Equity Growth from the injury
caused by such breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
The Client hereby irrevocably agrees that the remedies described in this
Article Four shall be in addition to, and not in limitation of, any of the
rights or remedies to which Equity Growth is or may be entitled to, whether at
law or in equity, under or pursuant to this Agreement.
4.4 ACKNOWLEDGMENT OF REASONABLENESS.
(A) The Client hereby represents, warrants and acknowledges that
its officers and directors have carefully read and
considered the provisions of this Article Four and, having
done so, agree that the restrictions set forth herein are
fair and reasonable and are reasonably required for the
protection of the interests of Equity Growth, its members,
officers, directors, consultants, agents and employees;
consequently, in the event that any of the above-described
restrictions shall be held unenforceable by any court of
competent jurisdiction, the Client hereby covenants, agrees
and directs such court to substitute a reasonable judicially
enforceable limitation in place of any limitation deemed
unenforceable and, the Client hereby covenants and agrees
that if so modified, the covenants contained in this Article
Four shall be as fully enforceable as if they had been set
forth herein directly by the Parties.
(B) In determining the nature of this limitation, the Client hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute hereunder recognize that the Parties
desire that these covenants not to compete or circumvent be imposed and
maintained to the greatest extent possible.
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ARTICLE FIVE
MISCELLANEOUS
5.1 NOTICES.
All notices, demands or other written communications hereunder shall be
in writing, and unless otherwise provided, shall be deemed to have been duly
given on the first business day after mailing by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
TO EQUITY GROWTH:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Telephone (941)
▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with copies to
THE YANKEE COMPANIES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
and
THE YANKEE COMPANIES, INC.1941 Southeast 51st
Terrace; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Administrative Officer
TO THE CLIENT:
SPORTS COLLECTIBLES EXCHANGE, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and, e-mail
▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
or at such address, telephone and fax numbers
as are reflected on the SEC's ▇▇▇▇▇ Internet site;
Attention: G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President & Chief Executive Officer
in each case, with copies to such other address or to such other persons as any
Party shall designate to the others for such purposes in the manner hereinabove
set forth.
5.2 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by Parties.
5.3 MERGER.
(A) 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.
(B) All prior agreements whether written or oral are merged herein and shall
be of no force or effect.
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5.4 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.
5.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than a conditions precedent, if any, 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 provision 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.
5.6 GOVERNING LAW AND VENUE.
This Agreement shall be construed in accordance with the laws of the
State of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in ▇▇▇▇▇▇ County, Florida.
5.7 DISPUTE RESOLUTION IN LIEU OF LITIGATION.
(A) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (a) First, the issue shall be submitted to mediation before
a mediation service in ▇▇▇▇▇▇ County, Florida to be
selected by lot from six alternatives to be provided, three
by Equity Growth and three by the Client.
(b) The mediation efforts shall be concluded within ten business days
after their initiation unless the Parties unanimously agree to an
extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit
the dispute to binding arbitration before an arbitration service
located in ▇▇▇▇▇▇ County, Florida, to be selected by lot, from six
alternatives to be provided, in the manner set forth above for
selection of a mediator;
(3) (A) Expenses of mediation shall be borne by the Parties
equally if successful but if unsuccessful, expenses of
mediation and of arbitration shall be borne by the Party or
Parties against whom the arbitration decision is rendered.
(B) If the terms of the arbitral award do not establish a prevailing
Party, then the expenses of unsuccessful mediation and arbitration
shall be borne 1/2 by the Client and 1/2 by Equity Growth.
(B) Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
(C) 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.
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5.8 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, jointly and severally, their successors,
assigns, personal representatives, estate, heirs and legatees.
5.9 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.
5.10 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.
5.11 FURTHER ASSURANCES.
The Parties hereby 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 of 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.
5.12 STATUS.
(A) Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship.
(B) Throughout the term of this Agreement, Equity Growth shall serve an
independent contractor, as that term is defined by the United States
Internal Revenue Service, and in conjunction therewith, shall be
responsible for all of his own tax reporting and payment obligations.
(C) In amplification of the foregoing, Equity Growth shall, subject to
reasonable reimbursement on a pre-approved budgetary basis, be
responsible for providing its own office facilities and supporting
personnel.
5.13 COUNTERPARTS.
(A) This Agreement may be executed in any number of counterparts delivered
through facsimile transmission.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
5.14 LICENSE.
(A) (1) This Agreement is the property of The Yankee Companies, Inc.,
a Florida corporation which serves as a strategic consultant to
Equity Growth ("Yankees").
(2) The use hereof by the Parties is authorized hereby solely for
purposes of this transaction and, the use of this form of
agreement or of any derivation thereof without Yankees' prior
written permission is prohibited.
(3) This Agreement shall not be construed more stringently or
interpreted less favorably against Equity Growth based on
authorship.
(B) The Client hereby acknowledge that neither Yankees nor Equity Growth is a
law firm and that neither provided it with any advice, legal or
otherwise, in conjunction with this Agreement, but rather, has suggested
that it rely solely on its own experience and advisors in evaluating or
interpreting this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
SPORTS COLLECTIBLES EXCHANGE, INC.
----------------------------
____________________________ By: ____________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, SECRETARY
{Seal}
EQUITY GROWTH SYSTEMS, INC.
----------------------------
____________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Dated: _____________________
Attest: ____________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SECRETARY
{Seal}
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