The following Form of Registration Rights Agreement was entered into with the
following individuals and entities: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and RC&A
Group, Inc.
FORM OF REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is dated as of
June 14, 2000 by and between VDC COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and the undersigned (the "Holder").
W I T N E S S E T H:
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WHEREAS, this Agreement is being delivered in connection with
a certain Agreement and Plan of Merger by and among the Company, Voice & Data
Communications (Latin America), Inc. ("Acquiror"), Rare Telephony, Inc.
("Acquiree"), and the holders of all of the outstanding shares of Acquiree
common stock, dated May 25, 2000, as amended, (the "Merger Agreement") pursuant
to which Acquiree merged into and with Acquiror, a wholly-owned subsidiary of
the Company;
WHEREAS, the Company is granting registration rights to Holder
for certain of the shares of Company common stock being issued to the Holder in
connection with the Merger Agreement (the exact number of registerable shares
being identified in the Merger Agreement); and
WHEREAS, all capitalized terms not hereinafter defined shall
have that meaning assigned to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
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(a) "Closing" shall mean the closing provided for in the
Merger 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) "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.
(h) "Registration Statement" shall mean the Registration
Statement of the Company filed with the SEC pursuant to the provisions of
Section 2 of this Agreement which covers the resale of the Restricted Stock 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.
(i) "Restricted Stock" shall mean the shares of Company
Common Stock issued to Holder in connection with the Merger Agreement for which
Holder has been granted registration rights, 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.
(j) "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.
(k) "SEC" shall mean the United States Securities and
Exchange Commission.
(l) "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. 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
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Holder given at least five calendar (5) days prior to the filing of such
Registration Statement, include in any such Registration Statement such
information as may be required to permit the public distribution of the
Restricted Stock. The Holder shall 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 2 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
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 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 2 without thereby incurring liability to the holders of the
Restricted Stock.
(b) Notwithstanding anything to the contrary contained
herein, the Company's obligation in Section 2(a) and 2(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 the distribution, issuance or
resale of any of its or any other securities.
(c) The registration rights above are conditioned upon
the Holder timely furnishing such information as may be reasonably requested by
the Company in order to include such Restricted Stock in the Registration
Statement.
3. 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 2(a) or 2(b) hereof and use reasonable efforts to cause such
Registration Statement to remain effective for that period identified in Section
3(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 3(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 Holders intended
method of disposition set forth in such Registration Statement for such period;
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(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;
(f) make available for inspection by 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 underwriter, attorney, accountant or
agent in connection with such Registration Statement;
(g) for purposes of Sections 3(a) and 3(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 eighteen (18) months from the date of 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);
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(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 timely 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.
4. Expenses.
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(a) For the purposes of this Section 4, the term
"Registration Expenses" shall mean: all expenses incurred by the Company in
complying with Sections 2 and 3 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.
(b) Except as otherwise provided herein, the Company will
pay all Registration Expenses in connection with the Registration Statements
filed pursuant to Section 2 of this Agreement. All Selling Expenses in
connection with any Registration Statements filed pursuant to Section 2 of this
Agreement shall, in the case of an underwritten offering, be borne by the
participating Holders in proportion to the number of shares sold by each, or, in
all other instances, shall be borne by the Holder incurring such expenses.
5. Obligations of Holder.
----------------------
(a) In connection with each registration hereunder,
each selling Holder will 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.
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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.
6. Information Blackout.
---------------------
At any time when a Registration Statement effected pursuant to
Section 2 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.
7. 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.
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(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.
8. Miscellaneous Provisions.
-------------------------
(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 with
regard to principles of conflicts of laws.
(b) Counterparts. This Agreement may be signed in any
-------------
number of 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 Holder.
(d) Notices. All notices, consents, waivers, and other
--------
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 or registered 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) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), 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).
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(i) if to the Company to:
VDC Communications, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(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. Other than
----------------------------------------
to the extent referenced to the Merger Agreement is necessary or appropriate,
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 (other than the Merger Agreement).
(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. This Agreement shall be governed by
------------
and construed and interpreted in accordance with the laws of the State of
Connecticut applicable to contracts executed and to be performed entirely within
said State. All controversies or claims arising out of or relating to this
Agreement shall be determined by binding arbitration applying the laws of the
State of Connecticut. The arbitration shall be conducted at Company's offices in
Greenwich, Connecticut, or at such other location designated by Company, before
the American Arbitration Association. The decision of the arbitrator(s) shall be
final and binding upon the parties, and judgment may be obtained thereon in any
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 thereto
unless the award otherwise provides. Nothing herein shall preclude a party from
seeking injunctive relief to restrain any breach or threatened breach of the
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covenants and agreements set forth in this Agreement or otherwise to obtain
specific performance of any such covenant or agreement, without the necessity of
posting bond or security in connection therewith.
(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.
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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