The following Form of Registration Rights Agreement was entered into
with: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as of April 1, 1998, ▇▇▇▇▇▇ ▇▇▇▇▇▇ as of April 1, 1998,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ as of September 2, 1998.
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT made and entered into as of this
___ day of _____, 1998, by and between VDC Corporation Ltd., a Bermuda
corporation (the "Company"), and _____, an individual residing at ______
("Holder").
BACKGROUND
----------
WHEREAS, pursuant to an Option to Purchase Common Shares of VDC
Corporation Ltd. dated _____, 1998, by and between the Company and the Holder,
the Company has agreed to issue to Holder options to purchase Common Shares of
the Company, par value $2.00 per share ("Common Stock") in accordance with the
terms of the Option Agreement.
WHEREAS, in order to induce Holder and the Company to enter into
the foregoing transactions, the Company has agreed to provide Holder with the
registration rights set forth in this Agreement.
ARTICLE 1 CERTAIN DEFINITIONS.
In addition to the other terms defined in this Agreement, the
following terms shall be defined as follows:
"Brokers' Transactions" has the meaning ascribed to such term
pursuant to Rule 144 under the Securities Act.
"Business Day" means any day on which the New York Stock Exchange
("NYSE") is open for trading.
"Common Stock" means any outstanding Common Shares of the Company.
"Company" means VDC Corporation Ltd., a Bermuda corporation, or
any successor thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
"Holder" means Holder for so long as (and to the extent that) he
owns any Registrable Securities, and each of his heirs and personal
representatives who become registered owners of Registrable Securities or
securities exercisable, exchangeable or convertible into Registrable Securities.
"Outstanding" means with respect to any securities as of any
date, all such securities therefore issued, except any such securities therefore
canceled or held by the Company or any successor thereto (whether in its
treasury or not) or any affiliate of the Company or any successor thereto shall
not be deemed "Outstanding" for the purpose of this Agreement.
"Person" means an individual, a partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Registrable Security(ies)" means the Common Stock issued to the
Holder pursuant to the Option Agreement, and any additional shares of Common
Stock or other equity securities of the Company issued or issuable after the
date hereof in respect of any such securities (or other equity securities issued
in respect thereof) by way of a stock dividend or stock split, in connection
with a combination, exchange, reorganization, recapitalization or
reclassification of Company securities, or pursuant to a merger, division,
consolidation or other similar business transaction or combination involving the
Company; provided that: as to any particular Registrable Securities, such
securities shall cease to constitute Registrable Securities (i) when a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of thereunder, or (ii) when and to the extent such securities are
permitted to be publicly sold pursuant to Rule 144 (or any successor provision
to such Rule) under the Securities Act or are otherwise freely transferable to
the public without further registration under the Securities Act, or (iii) when
such securities shall have ceased to be Outstanding and, in the case of clause
(ii), the Company shall, if requested by the Holder or Holders thereof, have
delivered to such Holder or Holders the written opinion of independent counsel
to the Company to such effect.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (i) the
fees, disbursements and expenses of the Company's counsel(s), accountants, and
experts in connection with the registration under the Securities Act of
Registrable Securities; (ii) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary prospectus or
final prospectus, any other offering documents and amendments and supplements
thereto, and the mailing and delivery of copies thereof to the underwriters and
dealers, if any; (iii) the cost of printing or producing any agreement(s) among
underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements, and any other documents in connection with
the offering, sale or delivery of Registrable Securities to be disposed of; (iv)
any other expenses in connection with the qualification of Registrable
Securities for offer and sale under state securities laws, including the fees
and disbursements of counsel for the underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(v) the filing fees incident to securing any required review by the NASDAQ Stock
Market of the terms of the sale of Registrable Securities to be disposed of and
any blue sky registration or filing fees, and (vi) the fees and expenses
incurred in connection with the listing of Registrable Securities on each
securities exchange (or the NASDAQ Stock Market) on which Company securities of
the same class are then listed; provided, however, that Registration Expenses
with respect to any registration pursuant to this Agreement shall not include
(x) expenses of any Holder's counsel, or (y) any underwriting discounts or
commissions attributable to Registrable Securities, each of which shall be borne
by the Holder.
2
"SEC" means the United States Securities and Exchange Commission,
or such other federal agency at the time having the principal responsibility for
administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
ARTICLE 2 PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. If at any time after the date
hereof, the Company proposes to file a registration statement under the
Securities Act (except with respect to registration statements on Forms ▇-▇,
▇-▇, or any other form not available for registering the Registrable Securities
for sale to the public), with respect to an offering of newly issued Common
Stock for its own account, then the Company shall in each case give written
notice of such proposed filing to the Holders of Registrable Securities at least
45 days before the anticipated filing date of the registration statement with
respect thereto (the "Piggyback Registration"), and shall, subject to Sections
2(b) and 2(c) below, include in such Piggyback Registration such amount of
Registrable Securities as the Holder may request within 20 days of the receipt
of such notice.
(b) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriter advises the Company in writing that in its opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in an orderly manner in such offering within a
price range acceptable to the Company, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such registration
to the extent that the number of shares to be registered will not, in the
opinion of the managing underwriter, adversely affect the offering of the
securities pursuant to clause (i), pro rata among the Holders of such
Registrable Securities on the basis of the number of shares owned by such Holder
and (iii) third, provided that all Registrable Securities requested to be
included in the registration statement have been so included, any other
securities requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities other than the Holders of Registrable Securities, and
the managing underwriter advises the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in an orderly manner in such offering within a
price range acceptable to the holders initially requesting such registration,
the Company shall include in such registration (i) first, the securities
requested to be included therein by the holders requesting such registration,
(ii) second, the Registrable Securities requested to be included in such
registration, to the extent that the number of shares to be registered will not,
in the opinion of the managing underwriter, adversely affect the offering of the
securities pursuant to clause (i), pro rata among the Holders of such securities
on the basis of the number of shares so requested to be included therein owned
by each such Holder, and (iii) third, other securities requested to be included
in such registration.
3
ARTICLE 3 HOLDBACK AGREEMENTS.
The Holder of Registrable Securities shall not effect any public
sale or distribution (including sales pursuant to Rule 144) of equity securities
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the 60 days prior to and the 120-day
period beginning on the effective date of any underwritten primary registration
undertaken by the Company (except as part of such underwritten registration),
unless the underwriter managing the registered public offering otherwise agrees.
ARTICLE 4 REGISTRATION PROCEDURES.
Whenever the Holder of Registrable Securities has requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
shall use its best efforts to effect the registration of the resale of such
Registrable Securities and pursuant thereto the Company shall as soon as
practicable:
(a) prepare and file with the SEC a registration statement
with respect to the resale of such Registrable Securities and use its best
efforts to cause such registration statement to become effective thereafter
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the counsel
selected by the Holder of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed, which
documents shall be subject to the review and consent of such counsel);
(b) notify the Holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as Holder reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such seller to
consummate the disposition of the Registrable Securities owned by the sellers in
such jurisdictions (provided that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
4
(e) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on
each securities exchange or trading system on which similar securities issued by
the Company are then listed;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary underwriting agreements
(containing terms acceptable to the Company) as the Holder of Registrable
Securities being sold or the underwriters, if any, reasonably requests (although
the Company has no obligation to secure any underwriting arrangements on behalf
of the Holder); and
(i) make available for inspection during normal business
hours by any seller of Registrable Securities, any underwriter participating in
any disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
ARTICLE 5 REGISTRATION EXPENSES.
All Registration Expenses in connection with any of the
registration events identified within this Agreement shall be borne by the
Company. All other expenses shall be borne by the Holder.
ARTICLE 6 INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent permitted
by law, the Holder of Registrable Securities, its officers and directors and
each Person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished to the Company by
such Holder for use therein or by such Holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company shall
provide reasonable and customary indemnification to such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holder of Registrable Securities.
5
(b) In connection with any registration statement in which
the Holder of Registrable Securities is participating, such Holder shall furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished by such Holder.
(c) Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party shall not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
shall not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
6
ARTICLE 7 OBLIGATION OF HOLDERS.
(a) In connection with each registration hereunder, Holder will
furnish to the Company in writing such information with respect to such Holder
and the securities held by such Holder, and the proposed distribution by them as
shall be reasonably requested by the Company in order to assure compliance with
federal and applicable state securities laws, as a condition precedent to
including such Holder's Registrable Securities in the registration statement.
Each Holder also shall agree to promptly notify the Company of any changes in
such information included in the registration statement or prospectus as a
result of which there is an untrue statement of material fact or an omission to
state any material fact required or necessary to be stated therein in order to
make the statements contained therein not misleading in light of the
circumstances then existing.
(b) In connection with each registration pursuant to this
Agreement, the Holder included therein will not effect sales thereof until
notified by the Company of the effectiveness of the registration statement, and
thereafter will suspend such sales after receipt of telegraphic or written
notice from the Company to suspend sales to permit the Company to correct or
update a registration statement or prospectus. At the end of any period during
which the Company is obligated to keep a registration statement current, the
Holder included in said registration statement shall discontinue sales of shares
pursuant to such registration statement upon receipt of notice from the Company
of its intention to remove from registration the shares covered by such
registration statement which remain unsold, and such Holder shall notify the
Company of the number of shares registered which remain unsold immediately upon
receipt of such notice from the Company.
ARTICLE 8 INFORMATION BLACKOUT.
(a) At any time when a registration statement effected
pursuant to this Agreement relating to Registrable Securities is effective, upon
written notice from the Company to the Holders that the Company has determined
in good faith that sale of Registrable Securities pursuant to the registration
statement would require disclosure of non-public material information not
otherwise required to be disclosed under applicable law (an "Information
Blackout"), all Holders shall suspend sales of Registrable Securities pursuant
to such registration statement until the earlier of:
(i) thirty (30) days after the Company makes such
good faith determination; and
(ii) such time as the Company notifies the Holders that
such
material information has been disclosed to the public or has ceased to be
material or that sales pursuant to such registration statement may otherwise be
resumed (the number of days from such suspension of sales by the Holders until
the day when such sale may be resumed hereunder is hereinafter called a "Sales
Blackout Period").
(b) Notwithstanding the foregoing, there shall be no more
than two (2) Information Blackouts during the term of this Agreement and no
Sales Blackout Period shall continue for more than thirty (30) consecutive days.
7
ARTICLE 9 MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the current jurisdiction of
incorporation of the Company without regard to that jurisdiction's conflict of
laws provisions. For the purposes of this paragraph, the term "current" shall
mean the time at which any dispute, issue or question shall arise hereunder.
(b) Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Holders.
(d) Notices. All communications under this Agreement shall
be sufficiently given if delivered by hand or by overnight courier or mailed by
registered or certified mail, postage prepaid, addressed,
(i) if to the Company, to:
VDC Corporation Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or, in the case of the Holders, at such address as each such Holder shall have
furnished in writing to the Company; or at such other address as any of the
parties shall have furnished in writing to the other parties hereto.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Entire Agreement; Survival; Termination. This Agreement
is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
8
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
have executed this Agreement as of the date first written above.
VDC CORPORATION LTD.
By:_________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
HOLDER:
By:_________________________________
9