<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 1997
ELECTRONICS COMMUNICATIONS CORP.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 1-13764 11-2649088
(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
10 Plog Road, Fairfield, New Jersey 07004
(Address of Principal Executive Office, including Zip Code)
Registrant's telephone number, including area code: (201) 808-8862
Former name or former address, if changed since last report: None
<PAGE>
On May 15, 1997, the Company consummated a "Settlement and Separation
Agreement" with NYNEX Mobile Communications, Inc. ("NYNEX") and Bell Atlantic
Mobile Communications, Inc. ("Bell Atlantic"), severing its agency relationship
with those entities with respect to the solicitation of cellular activations.
(A copy of the "Settlement and Separation Agreement" is annexed as an Exhibit
hereto.) The solicitation of cellular activations was the Company's largest
source of commission and other income over the past twelve months. As part of
this Agreement, the Company settled its claims for commissions due for the fixed
sum of $95,000, net of NYNEX's and Bell Atlantic's agreement to waive certain
payables due from the Company, aggregating approximately $358,906. In addition,
as part of the Settlement and Separation Agreement, Bell Atlantic and NYNEX have
agreed to release the Company from certain non-solicitation and non-competition
restrictions contained in the Company's Agency Agreements with NYNEX and Bell
Atlantic, respectively; which provisions would have precluded the Company from
soliciting prior customers and from engaging in solicitations of activations for
Personal Communications Services ("PCS") in the New York Metropolitan Area.
The Company continues to believe that PCS is the future of wireless
communications; and that on balance this termination of relationships and the
release from the foregoing non-solicitation/non competition restrictions was
a highly advantageous strategic accomplishment.
The Company has already entered into various preliminary agreements with
respect to solicitations for PCS, and cellular activations on behalf of
OmniPoint and AT&T (directly or through various agents) in the New York
Metropolitan Area. By virtue of these arrangements, the Company believes
that in the next several months it will be able to replace most or all of its
prior commission income derived from its NYNEX and Bell Atlantic Agency
Agreements. During this period, the Company will continue to experience cash
flow shortfalls resulting from the loss of this income source. Neither of
the OmniPoint, nor the indirect AT&T arrangements, preclude the Company from
other PCS activities, including activation solicitations for others.
Accordingly, the Company will continue to pursue its efforts to build out and
operate its own PCS system, pursuant to its recently acquired FCC PCS
Licenses, and to operate and expand its proprietary paging system, in which
capacities the Company acts, or will act, as an FCC licensed carrier.
EXHIBIT TO FORM 8-K
May 15, 1997 "Settlement and Separation Agreement" between the Company and Bell
Atlantic NYNEX Mobile, Inc., NYNEX Mobile Communications, Inc., Bell Atlantic
Mobile Systems, Inc. and Cellco Partnership.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: June 2, 1997
ELECTRONICS COMMUNICATIONS CORP.
By: /s/ William S. Taylor
-----------------------------
William S. Taylor, President
<PAGE>
SETTLEMENT AND SEPARATION AGREEMENT
AGREEMENT made this 15th day of May, 1997 by, between and among Free Trade
Distributors, Inc. ("Free Trade"), Trade Zone Distributors, Inc. ("Trade Zone")
and Electronics Communications Corp. ("ECC") ("Free Trade", "Trade Zone" and
"ECC" are sometimes hereinafter collectively referred to as "ECC"), and Bell
Atlantic NYNEX Mobile, Inc. ("BANM"), NYNEX Mobile Communications, Inc.
("NYNEX"), Bell Atlantic Mobile Systems, Inc. ("Bell Atlantic") and Cellco
Partnership ("Cellco"). ("BANM", "NYNEX", "Bell Atlantic" and "Cellco" are
sometimes hereinafter collectively referred to as "BANM.")
R E C I T A L S:
WHEREAS, ECC and BANM, through one or more of its and/or their
Representatives (as hereinafter defined) entered into certain "Agency
Agreements," dated November 1, 1993 and February 10, 1995, respectively,
pursuant to which ECC was appointed as an agent for each of NYNEX and Bell
Atlantic to solicit cellular telephone activations and services in certain
designated geographic areas; and otherwise have entered into a certain "OMNI"
Debit Card Program, and one or more customer agreements of general import (all
of the foregoing agreements and arrangements being hereinafter collectively
referred to and defined as the "Agreements"); and
WHEREAS, BANM has succeeded to all of the business and assets of NYNEX,
Bell Atlantic and/or Cellco, by way of merger, consolidation or otherwise,
solely in connection with the Agreements, as above referred to and defined; and
WHEREAS, ECC and BANM are desirous of providing for an orderly termination
of all of the Agreements, and any and all rights and obligations thereunder; and
are desirous of obtaining and arranging for a separation from the various
relationships between them, arising therefrom, including the resolution and
payment of all obligations and liabilities thereunder, and the termination of
all terms, conditions, restrictions and covenants contained in the Agreements,
and a final disposition, resolution and settlement of all other matters of every
kind and nature with respect to such Agreements, and the relationships between
ECC and BANM;
NOW, THEREFORE, IT IS AGREED, as follows:
1. Settlement of All Amounts Due and Payable.
Controversies exist with respect to the payment of various invoices, bills
and statements from BANM to ECC, reflecting claims of payment obligations of ECC
to BANM, and with respect to commissions and other amounts claimed to be due
from BANM to ECC. Any and all of such amounts of every kind and nature due
between and among BANM, ECC, and ECC and BANM, whether contingent, fixed or
inchoate, and whether known or unknown, are hereby fixed, determined and settled
by BANM's agreement and obligation hereunder to pay to ECC the lump sum of
$95,000.00, by delivering to ECC's attorneys, Rosenberg & Fein, as attorneys, a
certified or bank cashier's check in said amount or by delivering funds in such
amount via Federal Funds Wire Transfer upon the execution and delivery of this
Settlement and Separation Agreement, pursuant to instructions to be provided by
Rosenberg & Fein.
<PAGE>
2. Release of All Liabilities, Restrictions,
Covenants and Obligations -- Contractual or Otherwise.
In addition, controversies also exist between and among ECC and BANM with
respect to the renewal of one or more of the Agreements, and/or with respect to
the renewal or other continuation of certain rights and obligations there.
Accordingly, upon the execution of this Agreement, and by the execution and
delivery of the General Releases in the form annexed hereto, and upon the
delivery, collection and payment of the sum of $95,000.00, as provided in PARA
"1", BANM and ECC intend to, and do hereby, terminate in all respects the
Agreements, and each of them, and all rights and obligations thereunder of each
and every kind and nature; and ECC and BANM do hereby release and discharge each
other, and each and all their respective Representatives, from any and all
obligations, liabilities, restrictions, and covenants of any kind and nature,
under, and pursuant to, the Agreements, and each of them, including, without
limitation, any and all non-competition, non-solicitation, restrictive covenant,
confidentiality, non-circumvention or other contractual provisions, including
any claims of unfair trade practices, and any and all other claims of any and
all nature between the parties hereto; and from and after the execution and
delivery of this Agreement, and the performance of the obligations at Closing
hereunder (whether in person or otherwise), each of ECC and BANM, and each of
their Representatives, shall be free to pursue and conduct their business(es) as
if the Agreements had never been entered into or existed -- it being the
intention of the parties to make this mutual release of any and all liabilities
as broad as legally possible, without reservation of any kind or nature.
3. General Releases.
To effectuate the foregoing purposes, each of ECC and BANM shall execute,
and contemporaneously deliver at the Closing of this Agreement, General Releases
in the form annexed hereto.
4. Separation; No Disparagement.
As noted above, the foregoing provisions contained in PARAPARA "1", "2" and
"3" preceding are intended to set forth the basis of, and obligation for, an
orderly, responsible and business-like separation of the parties with respect to
the obligations, responsibilities and relationships set forth in and/or created
by the Agreements. The parties have determined and agree that it is in their
collective and respective best interests that they should also separate, and
they do hereby agree to separate, from the relationships created by the
Agreements in a manner and way such that neither party disparages the business,
business practices, credit, expertise, stewardship or other aspects of the
business, staff or prospects of the other, from and after the date hereof, as
related to any aspect or relationship pertaining to, existing under, and/or
created by the Agreements; except as may result from the good faith and
professional prosecution of competitive, business-like endeavors, by such
parties in the ordinary course of their business, without regard to the
transactions and occurrences which are the subject of this "Settlement and
Separation Agreement."
<PAGE>
5. Definitions.
For all purposes of this Settlement and Separation Agreement, the term
"Representative" shall be liberally construed and shall mean and include, but
shall not be limited to, all agents, employees, officers, executives, directors,
subsidiaries, associates and affiliates (as those terms are defined under the
Securities Act of 1933, and the Securities and Exchange Act of 1934, each as
amended, or otherwise), of each of ECC and BANM, and any others who directly, or
indirectly, represent, or act on behalf of, or for, the benefit of, in any
manner, the person or entity referred to, and shall also include and encompass
for these purposes, any corporation, partnership, joint venture, or other
entity, in which such person has an equity, voting or other substantial and
substantive interest, of record or beneficially, and any company and entity with
which such person is associated or affiliated.
6. Binding Effect.
All the terms of this Agreement shall be binding upon ECC and BANM and each
of its, or their employees, shareholders, representatives, successors, assigns
or administrators, and shall inure to the benefit of each of ECC and BANM, and
any of their successors or assigns or transferees, whether by operation of law,
or otherwise.
7. Attorneys' Fees and Costs.
In the event of a breach of any term or provision hereof, or the filing of
a suit or other legal proceeding in connection with the enforcement of any
provision hereof, the prevailing party shall, in addition to any other remedies
available to it, be entitled to reimbursement or the direct payment of its
attorneys' fees and costs from the losing party; provided such legal proceeding
is prosecuted to completion and determination is made by a judge or jury as to
the prevailing party.
8. Entire Agreement - Modification.
This Agreement and any other agreements or instruments executed
concurrently herewith, and contemplated hereunder, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof.
No claim of waiver, modification or amendment, consent or acquiescence with
respect to any of the provisions hereof, shall be made against any party, except
on the basis of a written instrument duly executed by all adverse parties, or
potential adverse parties, and duly acknowledged.
9. Governing Law.
This Agreement shall be deemed executed and delivered in the State of New
York, and this Agreement shall, in all respects, be construed in accordance
with, and governed by, the laws of the State of New York.
<PAGE>
10. Each Party is Represented by Separate Counsel.
Each of the parties hereto represents and acknowledges that it has been
represented in the negotiation and consummation of this Agreement by their own
counsel; and the terms, conditions and provisions of this Agreement have been
fully negotiated at arms-length. Accordingly, there shall not be any
presumption in favor of any party in the construction, interpretation or
enforcement of this Agreement by reason of any rules of construction against the
party preparing this Agreement, or any other similar rules of construction and
interpretation.
11. Counterparts.
This Agreement shall be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. The number of counterparts, which shall in all respects be
identical, shall be marked in the upper right-hand corner of the first page of
each such counterpart and shall be initialed by a representative of each party.
IN WITNESS WHEREOF, this Agreement has been executed by the Undersigned on
the date first written above.
ELECTRONICS COMMUNICATIONS TRADE ZONE DISTRIBUTORS, INC.
CORP.
By: -------------------------------- By: --------------------------------
/s/ Les Winder /s/ Les Winder
Authorized Representative Authorized Representative
FREE TRADE DISTRIBUTORS, INC. BELL ATLANTIC NYNEX MOBILE, INC.
By: -------------------------------- By: --------------------------------
/s/ Les Winder /s/ S. Mark Tuller
Authorized Representative Authorized Representative
CELLCO PARTNERSHIP, AS ASSIGNEE OF CELLCO PARTNERSHIP, AS ASSIGNEE OF
NYNEX MOBILE COMMUNICATIONS, INC. BELL ATLANTIC MOBILE SYSTEMS, INC.
By: Bell Atlantic NYNEX Mobile, Inc. By: Bell Atlantic NYNEX Mobile, Inc.
By: -------------------------------- By: --------------------------------
/s/ S. Mark Tuller /s/ S. Mark Tuller
Authorized Representative Authorized Representative
CELLCO PARTNERSHIP
By: Bell Atlantic NYNEX Mobile, Inc.
By: --------------------------------
/s/ S. Mark Tuller
Authorized Representative {Acknowledgments Overleaf}
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 9, 1997, before me personally came Les Winder, the Exec. V.P. of
Electronics Communications Corp., to me known, and known to me to be the
authorized officer who executed this instrument, and he acknowledged to me that
he set his hand and seal this day on behalf of Electronics Communications Corp.
/s/ Jeffrey L. Rosenberg
------------------------------------------
N O T A R Y P U B L I C
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 9, 1997, before me personally came Les Winder, the Exec. V.P. of
Free Trade Distributors, Inc., to me known, and known to me to be the authorized
officer who executed this instrument, and he acknowledged to me that he set his
hand and seal this day on behalf of Free Trade Distributors, Inc..
/s/ Jeffrey L. Rosenberg
------------------------------------------
N O T A R Y P U B L I C
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 9, 1997, before me personally came Les Winder, the Exec. V.P. of
Trade Zone Distributors, Inc., to me known, and known to me to be the authorized
officer who executed this instrument, and he acknowledged to me that he set his
hand and seal this day on behalf of Trade Zone Distributors, Inc.
/s/ Jeffrey L. Rosenberg
------------------------------------------
N O T A R Y P U B L I C
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 14, 1997, before me personally came S. Mark Tuller, the Vice
President Legal & External Affairs, General Counsel; Secretary of Bell Atlantic
NYNEX Mobile, Inc., to me known, and known to me to be the authorized officer
who executed this instrument, and he acknowledged to me that he set his hand and
seal this day on behalf of Bell Atlantic NYNEX Mobile Corp.
/s/ Martha J. Liotta
------------------------------------------
N O T A R Y P U B L I C
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 14, 1997, before me personally came S. Mark Tuller, the Vice
President Legal & External Affairs, General Counsel; Secretary of Bell Atlantic
NYNEX Mobile, Inc., the managing general partner of Cellco Partnership, assignee
of NYNEX Mobile Communications, Inc., to me known, and known to me to be the
authorized officer who executed this instrument, and he acknowledged to me that
he set his hand and seal this day on behalf of Cellco Partnership.
/s/ Martha J. Liotta
------------------------------------------
N O T A R Y P U B L I C
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 14, 1997, before me personally came S. Mark Tuller, the Vice
President Legal & External Affairs, General Counsel; Secretary of Bell Atlantic
NYNEX Mobile, Inc., the managing general partner of Cellco Partnership, assignee
of Bell Atlantic Systems, Inc., to me known, and known to me to be the
authorized officer who executed this instrument, and he acknowledged to me that
he set his hand and seal this day on behalf of Cellco Partnership.
/s/ Martha J. Liotta
------------------------------------------
N O T A R Y P U B L I C
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On May 14, 1997, before me personally came S. Mark Tuller, an authorized
signatory of Bell Atlantic NYNEX Mobile, Inc., to me known, and known to me to
be the authorized signatory for and on behalf of Cellco Partnership, and who
executed this instrument as an authorized representative of Bell Atlantic NYNEX
Mobile, Inc., which exercised this instrument for and on behalf of Cellco
Partnership.
/s/ Martha J. Liotta
------------------------------------------
N O T A R Y P U B L I C
