EXHIBIT 4.1
CONSULTING AGREEMENT
AGREEMENT, effective as of the 27th day of June, 1997, by and between
Electronics Communications Corp, "NASDAQ SYMBOL ELCC," with its principal
executive offices located at 00 Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as the "Company") and Bay State Development Trust, with
its principal offices located at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx
00000 (hereinafter referred to as the "Consultant").
W I T N E S S E T H:
WHEREAS, Consultant is in the business of [describe Bay State's business]
to include financial advisory and other services related to the services to be
provided below; and
WHEREAS, the Company has recently substantially and materially
reconstituted and redirected its entire operations from a wholesale distributor
of consumer and business electronics products to a full-service wireless
communications company in connection with the development and exploitation of
its licenses to operate a paging system and a personal communications services
network in the northeastern United States; and
WHEREAS, the Company has experienced very substantial and material
additional demands on various of its executives, officers and directors in
connection with this reconstitution and redirection which has adversely impacted
on the availability of such individuals to attend to and implement various
internal controls, accounting procedures and other facilities in connection with
the Company's expanding environment; and
WHEREAS, the Company requires a review and analysis of its policies,
procedures and facilities, including and especially those relating to the need
for additional officers and/or employees to implement and oversee internal
forecasting, projections and oversight.
NOW, THEREFORE, in consideration of mutual promises contained herein, the
parties hereto hereby agree as follows:
1. Term. Consultant hereby agrees to act as consultant on behalf of the
Company for a twelve (12) month term commencing on the date hereof ("Effective
Date") and terminating on the twelfth (12th) month anniversary of the Effective
Date, and as such will provide the consulting services described herein.
2. Consulting Services. Consultant shall promptly, upon the execution of
this Agreement, undertake a full review and analysis of the Company's financial
condition, including its cash flow, present and anticipated operations, and
capital requirements, and its continuing development and evolution as a
full-service wireless telecommunications company. In such connection, Consultant
shall preliminarily review and analyze the Company's Annual Report on Form
10-KSB/A for the year ended December 31, 1996, its most recent Regulation
D/Regulation S Confidential Offering Memorandum, and its Registration Statement
on Form S-3 with respect to which the last filing was made pursuant to
Pre-Effective Amendment No. 5, which Registration Statement is currently pending
before the Securities Exchange Commission.
Thereafter, Consultant shall meet with such executives, officers and
directors as it determines are necessary to supplement the foregoing review and
analysis, with a view to a better and xxxxxx understanding of the Company's need
for improved forecasting, projection capabilities, budgets and internal
financial ordering and maintenance controls, with respect to present and
anticipated operations.
Thereafter, Consultant shall submit written reports and analyses regarding
its findings and proposals, including, but not limited to, the following topics
and considerations:
(a) the need for enhancement of its internal financial and
accounting statements and personnel;
(b) the need for specific criteria, procedures, mechanisms and
facilities to project and forecast the Company's costs, expenses and other
expenditures, and its income stream and payables with respect to payment and
billing cycles and cash flow needs and availabilities;
(c) the Company's need for and availability with respect to various
forms of funding, including various forms of vendor financing or other forms of
lending, both current and long-term, in connection with the Company's buildout
of its PCS network, and the expansion, continued development, promotion and
commercial exploitation of its PCS and proprietary paging system and networks.
Thereafter, Consultant shall meet with the executive management, officers
and directors of the Company to further consider, analyze, refine and thereafter
implement those aspects of the Company's written proposals as management of the
Company determines are most beneficial and efficacious with respect to the
Company.
Thereafter, Consultant shall monitor the implementation of such proposals,
mechanisms, features, plans and personnel with a view to, and for the purpose
of, fine-tuning, revising and/or modifying such plans, methodologies and
procedures during the term of this Agreement, it being the expectation of the
parties that the success of the Company's proposals and analysis will or would
be reflected in increased efficiencies, earnings and profitability of the
Company, and the concomitant enhancement of the Company's value and stock price.
3. Compensation. In consideration for Consultant entering into this
Agreement, Consultant will receive 50,000 freely tradable non-dilutive shares of
the Company's common stock registered under an S-8 registration (the "Shares")
upon the payment of the par value of $.001 per share. The Consultant
acknowledges that (a) he is a sophisticated investor having substantial
knowledge and experience in purchasing and selling securities (both in private
and public offerings); and (b) the Shares are registered under the Securities
Act of 1933 (the "Act") and as a result may be sold at any time in compliance
with the Act.
4. Conflicts. Consultant shall be an independent contractor and shall have
no right or authority to assume or create any obligation or responsibility,
express or implied, on behalf of or in the name of the Company, unless
specifically authorized in writing by the Company. No provision of this
Agreement shall be construed to preclude Consultant, or an agent, associate,
affiliate or employee of Consultant from engaging in any activity whatsoever,
with any person or entity, participating in any corporation, partnership, trust
or other business entity or from receiving compensation or profit therefor.
5. Standard of Care. Consultant (including an person or entity acting for
or on behalf of Consultant) shall not be liable for any mistakes of fact, errors
of judgment, for losses sustained by the Company for any acts or omissions of
any kind, unless caused by gross negligence or intentional misconduct of
Consultant or any person or entity acting for or on behalf of Consultant.
6. Entire Agreement; Waivers. This Agreement supersedes any and all
agreements, arrangements and understandings relating to the matters provided for
herein, entered into or reached
prior to the date hereof. No amendment, waiver or discharge of any provisions
hereof shall be effective unless in writing signed by the parties hereto. This
Agreement shall inure to the successors and assigns of the parties hereto. This
Agreement may not be assigned by any party hereto without the prior written
consent of the other party hereto.
7. Headings. The headings of this Agreement are for purposes of reference
only and shall not be considered in construing this Agreement.
8. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New Jersey, without regard to conflict
of laws principles thereof, or the actual domiciles of the parties hereto. In
addition, Bay State Development Corp. represents and acknowledges that it is a
sole proprietor corporation and eligible to receive stock under an S-8 filing.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf, all effective as of
the date first written above.
ELECTRONICS COMMUNICATIONS CORP. BAY STATE DEVELOPMENT TRUST
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxx
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Xxxxxxx X. Xxxxxx, President Xxxxx Xxxxxxx, Trustee
