The following Form of Registration Rights Agreement was entered into with the
following individuals and entities in June 2000 as follows:
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Individual / Entity
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▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇
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O.T. Finance, SA
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▇▇▇▇ Trust
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The ▇▇▇▇▇▇ ▇. ▇▇▇▇ Revocable
Living Trust
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The ▇▇▇▇▇▇ ▇▇▇▇ Revocable
Living Trust
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FORM OF REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is dated as of
June 28, 2000 by and between VDC COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and the undersigned (the "Holder" or the "Investor").
W I T N E S S E T H:
--------------------
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Investor is purchasing from the Company, pursuant to the
Securities Purchase Agreement dated the date hereof (the "Purchase Agreement"),
certain shares of the Company's Common Stock (the "Securities");
WHEREAS, all capitalized terms not hereinafter defined shall
have that meaning assigned to them in the Purchase Agreement; and
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the Securities.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
(a) "Closing" shall mean the closing provided for in the
Purchase Agreement.
(b) "Common Stock" shall mean the common stock of the
Company, par value $.0001 per share.
(c) "Company" shall mean VDC Communications, Inc.
(d) "Offering" shall mean that private placement
transaction pursuant to which the Company shall offer shares of Common Stock
upon terms and conditions set forth in the Purchase Agreements.
(e) "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.
(f) "Principal Market" means the OTC Electronic
Bulletin Board, the Nasdaq National Market, the Nasdaq Small Cap Stock Market,
the American Stock Exchange or the New York Stock Exchange, whichever is at the
time the principal trading exchange or market for the Common Stock.
(g) "Registration Statement" shall mean the
Registration Statement of the Company filed with the SEC pursuant to the
provisions of Section 3 of this Agreement which covers the resale of the
Securities on Form ▇-▇, ▇-▇ or any other appropriate form then permitted by the
SEC to be used for such registration and the sales contemplated to be made
thereby under the Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such Registration Statement,
including any pre-and post- effective amendments thereto, in each case including
the prospectus contained therein, all exhibits thereto and all materials
incorporated by reference therein.
(h) "Restricted Stock" shall mean the Securities that may
be issued to the Holder pursuant to the Purchase 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 shares of
Restricted Stock, such securities shall cease to constitute Restricted Stock (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 distributed pursuant to subparagraph (k) of Rule 144 (or any
successor provision to such Rule) promulgated under the Securities Act or are
otherwise freely transferable to the public without further registration under
the Securities Act.
(i) "Securities Act" shall mean the Securities Act of
1933, as amended, or any similar or successor federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at any
relevant time.
(j) "SEC" shall mean the United States Securities and
Exchange Commission.
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(k) "Trading Day" means a day on which the Principal
Market on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Connecticut are
authorized or obligated by law or executive order to close.
2. Restrictions on Transfer. The Holder acknowledges and
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understands that prior to the registration of the Restricted Stock as provided
herein, the Restricted Stock and the Securities are "restricted securities" as
defined in Rule 144 promulgated under the Securities Act. The Holder understands
that no disposition or transfer of the Restricted Stock or the Securities may be
made by the Holder in the absence of (i) an opinion of counsel to the Holder,
satisfactory to the Company and prepared at Holder's expense, that such transfer
may be made without registration under the Securities Act or any applicable
state securities laws; or (ii) such security has been registered for sale under
the Securities Act and registered or qualified under applicable state securities
laws relating to the offer and sale of securities
3. Registration Rights.
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(a) Piggyback Registration Rights.
The Company shall advise the Holder by written notice at least
ten (10) calendar days prior to the filing of a Registration Statement under the
Securities Act (excluding registration on Forms ▇-▇, ▇-▇, or any successor forms
thereto), covering securities of the Company to be offered and sold (whether by
the Company or any stockholder thereof) and shall, upon the request of the
Holder given at least five (5) calendar days prior to the filing of such
Registration Statement, include in any such Registration Statement such
information as may be required to permit an offering of the Restricted Stock.
The Holder shall promptly furnish such information as may be reasonably
requested by the Company in order to include such Restricted Stock in the
Registration Statement. In the event that any registration pursuant to this
Section 3 shall be, in whole or in part, an underwritten public offering of
Common Stock on behalf of the Company, and the managing underwriters advise 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 Company,
the Company shall include in such registration (i) first, the securities the
Company proposes to sell, and (ii) second, the Restricted Stock and any other
registrable securities eligible and 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 underwriters, adversely affect the offering of
the securities pursuant to clause (i), pro rata among the holders of such
registrable securities, including the Holder of the Restricted Stock, on the
basis of the number of shares eligible for registration which are owned by all
such holders. Notwithstanding the foregoing, the Company may withdraw any
registration statement referred to in this Section 3 without thereby incurring
liability to the holders of the Restricted Stock.
(b) Shelf Registration.
In the event that the Restricted Stock is not otherwise
included within a Registration Statement filed pursuant to Section 3(a) above,
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the Company shall use reasonable efforts to prepare and file, not later than
twelve (12) months following the Closing of the Offering, a Registration
Statement with the SEC.
(c) Notwithstanding anything to the contrary contained
herein, the Company's obligation in Section 3(a) and 3(b) above shall extend
only to the inclusion of the Restricted Stock in a Registration Statement filed
under the Securities Act. The Company shall have no obligation to assure the
terms and conditions of distribution, to obtain a commitment from an underwriter
relative to the sale of the Restricted Stock or to otherwise assume any
responsibility for the manner, price or terms of the distribution of the
Restricted Stock. Furthermore, the Company shall not be restricted in any manner
from including within the Registration Statement or the distribution, issuance
or resale of any of its or any other securities.
4. Registration Procedures. Whenever it is obligated to register
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any Restricted Stock pursuant to this Agreement, the Company shall:
(a) prepare and file with the SEC a Registration
Statement with respect to the Restricted Stock in the manner set forth at
Sections 3(a) or 3(b) hereof and use reasonable efforts to cause such
Registration Statement to remain effective for that period identified in Section
4(g) hereafter;
(b) 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
the period specified in Section 4(g) below and to comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such Registration Statement in accordance with the Holder's intended
method of disposition set forth in such Registration Statement for such period;
(c) furnish to the Holder and to each underwriter, if
any, such number of copies of the Registration Statement and the prospectus
included therein (including each preliminary prospectus), as such person may
reasonably request in order to facilitate the public sale or other disposition
of the Restricted Stock covered by such Registration Statement;
(d) use reasonable efforts to register or qualify the
Restricted Stock covered by such Registration Statement under the securities or
blue sky laws of such jurisdictions as the Holder, or, in the case of an
underwritten public offering, the managing underwriter shall reasonably request;
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) promptly notify the Holder under such Registration
Statement and each underwriter, 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 contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits 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 under which they were made;
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(f) make available for inspection by the Holder, any
underwriter participating in an underwritten disposition on behalf of any
Holder, and any attorney, accountant or other agent retained by such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by the Holder,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(g) for purposes of Sections 4(a) and 4(b) above, the
period of distribution of Restricted Stock shall be deemed to extend until the
earlier of: (A) in an underwritten public offering of all of the Restricted
Stock, the period in which each underwriter has completed the distribution of
all securities purchased by it; (B) in any other registration, the earlier of
the period in which all shares of Restricted Stock covered thereby shall have
been sold or two (2) years from the Closing.
(h) if the Common Stock of the Company is listed on
any securities exchange or automated quotation system, the Company shall use
reasonable efforts to list (with the listing application being made at the time
of the filing of such Registration Statement or as soon thereafter as is
reasonably practicable) the Restricted Stock covered by such Registration
Statement on such exchange or automated quotation system;
(i) enter into normal and customary underwriting
arrangements or an underwriting agreement and take all other reasonable and
customary actions if the Holder sells its shares of Restricted Stock pursuant to
an underwriting (however, in no event shall the Company, in connection with such
underwriting, be required to undertake any special audit of a fiscal period in
which an audit is normally not required);
(j) notify the Holder if there are any amendments to
the Registration Statement, any requests by the SEC to supplement or amend the
Registration Statement, or of any threat by the SEC or state securities
commission to undertake a stop order with respect to sales under the
Registration Statement; and
(k) cooperate in the removal of any restrictive legends
from the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
5. Expenses.
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(a) For the purposes of this Section 5, the term
"Registration Expenses" shall mean: all expenses incurred by the Company in
complying with Sections 3 and 4 of this Agreement, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
"blue sky" fees, fees of the National Association of Securities Dealers, Inc.
("NASD"), fees and expenses of listing shares of Restricted Stock on any
securities exchange or automated quotation system on which the Company's shares
are listed and fees of transfer agents and registrars. The term "Selling
Expenses" shall mean: all underwriting discounts and selling commissions
applicable to the sale of Restricted Stock and all accountable or
non-accountable expenses paid to any underwriter in respect of the sale of
Restricted Stock.
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(b) Except as otherwise provided herein, the Company will
pay all Registration Expenses in connection with the Registration Statements
filed pursuant to Section 3 of this Agreement. All Selling Expenses in
connection with any Registration Statements filed pursuant to Section 3 of this
Agreement shall be borne by the participating Holder in proportion to the number
of shares sold by each.
6. Obligations of Holder.
----------------------
(a) In connection with each registration hereunder, each
selling Holder will promptly furnish to the Company in writing such information
with respect to such seller and the securities held by such seller, and the
proposed distribution by him or 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 seller's Restricted
Stock in the Registration Statement. Each selling 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 whose shares are 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, facsimile 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.
7. Information Blackout and Holdbacks.
-----------------------------------
(a) At any time when a Registration Statement effected
pursuant to Section 3 relating to Restricted Stock is effective, upon written
notice from the Company to the Holder that the Company has determined in good
faith that sale of Restricted Stock pursuant to the Registration Statement would
require disclosure of non-public material information, the Holder shall suspend
sales of Restricted Stock pursuant to such Registration Statement until such
time as the Company notifies the Holder 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.
(b) Notwithstanding any other provision of this
Agreement, each Holder of Restricted Stock 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 thirty (30) calendar days prior to the commencement
of any primary offering to be undertaken by the Company of shares of its own
common stock (the "Primary Offering"), which may also include other securities,
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and ending one hundred and twenty (120) calendar days after completion of any
such Primary Offering, unless the Company, in the case of a non-underwritten
offering, or the managing underwriter, in the case of an underwritten Primary
Offering, otherwise agrees.
8. Indemnification
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(a) The Company agrees to indemnify, to the extent
permitted by law, each Holder of Restricted Stock, 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.
(b) In connection with any Registration Statement in
which a Holder of Restricted Stock is participating, each 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: (i) 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); or (ii) any disposition of the Restricted Stock in a
manner that fails to comply with the permitted methods of distribution
identified within the Registration Statement; provided that the obligation to
indemnify (if there shall be more than one Holder) shall be individual, not
joint and several, for each Holder and shall be limited to the net amount of
proceeds received by such Holder from the sale of Restricted Stock pursuant to
such Registration Statement.
(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
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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.
9. Miscellaneous Provisions.
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(a) Governing Law. This Agreement shall be governed by
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and construed in accordance with the laws of the State of Connecticut without
regard to principles of conflicts of laws.
(b) Counterparts. This Agreement may be executed in
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multiple counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by exchange of facsimile copies showing the signatures
of the parties, and those signatures need not be affixed to the same copy. The
facsimile copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further execution.
(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 Holder.
(d) Notices. All notices, consents, waivers, and other
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communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt), provided
that a copy is mailed by certified mail, return receipt requested (provided that
facsimile notice shall be deemed received on the next business day if received
after 5:00 p.m. Eastern Standard Time), or (c) on the next business day, if sent
by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and facsimile numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice to the other
parties)
(i) if to the Company to:
VDC Communications, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) if to the Holder, to the address identified
on the books and records of the Company
(e) Successors and Assigns; Holders as Beneficiaries.
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This Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and assigns, and the agreements of the Company
herein shall inure to the benefit of the Holders and their respective successors
and assigns.
(f) Headings. The headings in this Agreement are for
---------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) 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, representations, 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.
(h) Construction. This Agreement and any related
-------------
instruments will not be construed more strictly against one party then against
the other by virtue of the fact that drafts may have been prepared by counsel
for one of the parties, it being recognized that this Agreement and any related
instruments are the product of negotiations between the parties and that both
parties have contributed to the final preparation of this Agreement and all
related instruments.
(i) Arbitration. All controversies arising out of or
------------
related to this Agreement shall be determined by binding arbitration applying
the laws of the State of Connecticut. Any arbitration between the parties shall
be conducted at the Company's offices in Greenwich, Connecticut, or at such
other location designated by the Company, before the American Arbitration
Association (the "AAA"). The decision of the arbitrator(s) shall be final and
binding upon the parties and judgment may be obtained thereon by either party in
a court of competent jurisdiction. Each party shall bear the cost of preparing
and presenting its own case. The cost of the arbitration, including the fees and
expenses of the arbitrator(s), shall be shared equally by the parties hereto
unless the award otherwise provides. Nothing in this section will prevent either
party from resorting to judicial proceedings if interim injunctive relief under
the laws of the State of Connecticut from a court is necessary to prevent
serious and irreparable injury to one of the parties, and the parties hereto
agree that the state courts in Stamford, Connecticut and the United States
District Court in the District of Connecticut in Bridgeport, Connecticut shall
have exclusive subject matter and in personam jurisdiction over the parties for
purposes of obtaining interim injunctive relief.
(j) Agreement Read and Understood. Both parties hereto
------------------------------
acknowledge that they have had an opportunity to consult with an attorney, and
such other experts or consultants as they deem necessary or prudent, regarding
this Agreement and that they, or their designated agents, have read and
understand this Agreement.
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(k) Binding Effect. This Agreement shall not be binding
---------------
on the Company unless and until an authorized executive officer of the Company
has evidenced acceptance thereof by executing the signature page at the end
hereof.
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto
have caused this Agreement to be signed.
ATTEST: VDC COMMUNICATIONS, INC.
By:
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
WITNESS:
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