The following Form of Registration Rights Agreement was entered into with the
following individuals and entities as follows:
INDIVIDUAL / ENTITY DATE OF AGREEMENT
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ October 27, 1999
▇▇▇▇ ▇. ▇▇▇▇▇▇ October 26, 1999
▇▇▇▇ ▇. ▇▇▇▇▇ October 26, 1999
O.T. Finance, SA October 26, 1999
▇▇▇▇ Trust October 26, 1999
The ▇▇▇▇▇▇ ▇. ▇▇▇▇ Revocable Living Trust October 26, 1999
▇▇▇▇▇ Partners, L.P. October 26, 1999
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
This Registration Rights Agreement (this "AGREEMENT") is dated as of
October -----, 1999 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 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, reasonably
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.
(a) Piggyback Registration Rights.
The Company shall advise the Holder by written notice 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.
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In the event that the Restricted Stock is not otherwise
included within a Registration Statement filed pursuant to Section 3(a) above,
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 and use reasonable efforts to have such Registration
Statement declared effective promptly for the purpose of facilitating the public
resale of the Restricted Stock.
(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 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
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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 the Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by any such
Holder or 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 effective date of the first Registration
Statement filed by the Company with the SEC pursuant to this Agreement.
(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.
5
(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.
(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
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.
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(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) 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, and ending one
hundred and twenty (120) 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
(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
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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 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.
(a) Governing Law. This Agreement shall be governed by 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 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.
8
(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, 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: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Holder, to the address identified on the
books and records of the Company.
(e) Successors and Assigns; Holders as Beneficiaries. 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.
9
(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.
(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:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- ---------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
WITNESS:
---------------------------- ---------------------------
^
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