-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vw/oodf90VIJI2BWdXylBZY3sFV8x2kynDgTitMjSwKCH91w/rhY5HcehveG9WGu d0xNiVfkiHKm+uQgOorDCQ== 0000889812-99-000024.txt : 19990107 0000889812-99-000024.hdr.sgml : 19990107 ACCESSION NUMBER: 0000889812-99-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981119 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VDC COMMUNICATIONS INC CENTRAL INDEX KEY: 0000784961 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 061510832 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14281 FILM NUMBER: 99501628 BUSINESS ADDRESS: STREET 1: 75 HOLLY HILL LANE CITY: GREENWICH STATE: CT ZIP: 06831 BUSINESS PHONE: 2038695100 MAIL ADDRESS: STREET 1: 75 HOLLY HILL LANE CITY: GREENWICH STATE: CT ZIP: 06831 FORMER COMPANY: FORMER CONFORMED NAME: VDC CORP LTD DATE OF NAME CHANGE: 19960117 8-K 1 CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934 Date of Report (Date of earliest event reported): November 19, 1998 VDC COMMUNICATIONS, INC. ------------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 0-14045 06-1524454 - -------------------------------- --------------------- --------------- (Jurisdiction of incorporation (Commission File No.) (I.R.S. Employer or organization) Identification) 75 Holly Hill Lane, Greenwich, CT 06830 ------------------------------------------------------------------ (Address of principal executive offices) (203) 869-5100 ------------------------------ (Registrant's telephone number, including area code) Item 5. Other Events. Roberts Resignation See the following press release, dated November 20, 1998, announcing the resignation of Dr. James C. Roberts ("Dr. Roberts") as an executive officer and a member of VDC Communications, Inc.'s (the "Company") Board of Directors. Dr. Roberts did not resign because of a disagreement with the Company's operations, policies or practices and did not furnish the registrant with a letter describing any such disagreement. FOR IMMEDIATE RELEASE Contact: Clay Moran VDC Communications, Inc. (203) 869-5100 VDC COMMUNICATIONS ANNOUNCES THE RESIGNATION OF DR. JAMES ROBERTS AS OFFICER AND DIRECTOR Greenwich, CT: November 20, 1998. VDC Communications, Inc. (AMEX:"VDC") announced today the resignation, effective immediately, of Dr. James Roberts as an executive officer and member of the Company's Board of Directors. Dr. Roberts has resigned to pursue other interests. Frederick A. Moran, the Company's Chairman and CEO, will handle Dr. Roberts' duties. In conjunction with Dr. Roberts' resignation, Dr. Roberts has agreed to surrender approximately two million shares of the Company's common stock to the Company's treasury. Dr. Roberts has agreed to become a telecommunications consultant to the Company for the next two years. VDC is a facilities-based international telecommunications company, focused on international telecommunications gateways and long distance carrier services. The Company currently carries international telecommunications traffic and has points of presence in major US cities and Central America. The Company is currently developing opportunities throughout the world, including, Asia, Africa and further development in the Americas. Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements made by VDC involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of VDC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, uncertainty as to whether VDC will secure the capital resources necessary to implement its planned operations, as well as risks associated with international operations, dependence on licenses, governmental regulations, technological changes, intense competition and dependence on management. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. VDC disclaims any obligation to update any of the forward-looking statements contained herein to reflect any change in VDC's expectation with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements. For further information, you may access VDC Communications Inc.'s web site at www.vdccorp.com, or call Clayton F. Moran, Vice President - Finance, at: Telephone: 203-869-5100; Fax: 203-552-0908. Metromedia China Corporation Transaction See the following press release, dated November 24, 1998, announcing certain modifications to the purchase by the Company of certain assets from PortaCom Wireless, Inc. FOR IMMEDIATE RELEASE Contact: Clay Moran VDC Communications, Inc. (203) 869-5100 VDC COMMUNICATIONS IMPROVES TERMS OF METROMEDIA CHINA CORPORATION SHARE AND WARRANT PURCHASE PROVIDING FOR POSSIBLE REDUCTION OF PURCHASE PRICE BY 2,000,000 SHARES OF VDC STOCK Greenwich, CT: November 24, 1998. VDC Communications, Inc. (AMEX:"VDC") previously announced the acquisition of 2.0 million shares and warrants to purchase 4.0 million shares of Metromedia China Corporation ("MCC"). The purchase price consisted of approximately 5.15 million shares of VDC common stock and $2,000,000 in cash, amounting to a total consideration of $37,770,000. Under the terms of the amended agreement, 2.0 million of the 5.15 million VDC shares will be held in escrow. If MCC achieves any of certain stepped performance criteria, a portion or all of these shares will be released. Those shares not so released will be returned to VDC for cancellation. VDC is a facilities-based international telecommunications company, focused on international telecommunications gateways and long distance carrier services. The Company currently carries international telecommunications traffic and has points of presence in major US cities and Central America. The Company is currently developing opportunities throughout the world, including, Asia, Africa and further development in the Americas. Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements made by VDC involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of VDC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, uncertainty as to whether VDC will secure the capital resources necessary to implement its planned operations, as well as risks associated with international operations, dependence on licenses, governmental regulations, technological changes, intense competition and dependence on management. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. VDC disclaims any obligation to update any of the forward-looking statements contained herein to reflect any change in VDC's expectation with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements. For further information, you may access VDC Communications Inc's. web site at www.vdccorp.com, or call Clayton F. Moran, Vice President - Finance, at: Telephone: 203-869-5100; Fax: 203-552-0908. Item 7. Financial Statements and Exhibits. (c) Exhibits (referenced to Item 601 of Regulation S-K) Exhibit No. Description 10.1 Settlement, Release and Discharge Agreement, by and among VDC Communications, Inc., Dr. James C. Roberts, and Frederick A. Moran, dated November 19, 1998. 10.2 Settlement Agreement between VDC Communications, Inc., PortaCom Wireless, Inc., and Michael Richards, dated November 24, 1998. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereto duly authorized. VDC COMMUNICATIONS, INC. Date: January 5, 1999 By:/s/ Frederick A. Moran ---------------------- Frederick A. Moran Chairman, C.E.O, C.F.O EXHIBIT INDEX Exhibit Number Page Number in (Referenced to Rule 0-3(b) Sequential Item 601 of Numbering System Reg. S-K) Where Exhibit Can Be Found 10.1 Settlement, Release and Discharge Agreement, by and among VDC Communications, Inc., Dr. James C. Roberts, and Frederick A. Moran, dated November 19, 1998. 10.2 Settlement Agreement between VDC Communications, Inc., PortaCom Wireless, Inc., and Michael Richards, dated November 24, 1998. EX-10.1 2 SETTLEMENT, RELEASE AND DISCHARGE AGREEMENT SETTLEMENT, RELEASE AND DISCHARGE AGREEMENT THIS SETTLEMENT, RELEASE AND DISCHARGE AGREEMENT (the "Agreement"), made this 19th day of November, 1998 (the "Date of this Agreement"), by and among VDC COMMUNICATIONS, INC. (the "Company"), a corporation organized and existing under the laws of the State of Delaware, DR. JAMES C. ROBERTS ("Roberts"), an individual presently residing within the State of Connecticut and FREDERICK A. MORAN, an individual presently residing within the State of Connecticut ("Moran"). WITNESSETH: WHEREAS, VDC Corporation Ltd., a Bermuda corporation which merged with and into the Company on or about November 6, 1998 ("VDC Bermuda"), and Roberts are parties to an employment agreement dated as of March 3, 1998 (the "Employment Agreement") pursuant to which Roberts served as an officer and director of VDC Bermuda and the Company; WHEREAS, as a result of the merger of VDC Bermuda with and into the Company on or about November 6, 1998 (the "Domestication Merger"), the Company is the successor-in-interest to all of the assets, liabilities and agreements of VDC Bermuda, including, without limitation, the Employment Agreement; WHEREAS, during his term of employment, Roberts, directly or indirectly, was a principal stockholder of the Company; WHEREAS, the Company and Roberts desire to adjust his stock ownership in the Company and terminate the Employment Agreement, together with any and all other arrangements, agreements or understandings between them, and except as otherwise set forth herein, to terminate any and all claims that relate in any manner to any matters arising out of or relating in any way to Roberts' employment with or severance from the Company, or that otherwise relate to Roberts' relationship with the Company, and to take the other actions as provided below; WHEREAS, in conjunction with the termination of all such agreements and arrangements, Roberts does hereby tender his resignation as set forth in Paragraph 1 hereafter; WHEREAS, on or about June 24, 1998, Moran and Joan B. Moran, husband and wife, entered into a loan agreement with Roberts which was secured by a pledge of stock by the Trust and Moran, individually, has loaned Roberts certain funds for moving expenses (collectively the "Moran Loans"); and WHEREAS, Roberts and Moran would like to provide for the repayment of the Moran Loans as set forth herein. NOW, THEREFORE, in consideration of the mutual premises and covenants contained herein, the parties hereto, intending to be legally bound hereunder, agree as follows: 1. Resignation and Termination of Services. 1.1 Roberts hereby resigns as an officer, director and employee of the Company, effective as of November 19, 1998, and the Company hereby accepts such resignation. Roberts and the Company further agree to terminate, effective November 19, 1998, the Employment Agreement, together with any and all other arrangements, agreements and understandings between them relating in any way or manner to Roberts' employment by the Company or services on behalf of the Company; provided, however, that the provisions of Paragraph 7 of the Employment Agreement shall survive the termination thereof. 1.2 Roberts hereby resigns as an officer and director of VDC Bermuda, effective as of November 19, 1998, and the VDC Bermuda hereby accepts such resignation. 2 1.3 Roberts hereby resigns from all positions he held with Voice & Data Communications (Hong Kong) Limited, including, but not limited to director, as of the Date of this Agreement. 1.4 Roberts hereby resigns from all positions he held, if any, with Masatepe Communications, U.S.A., L.L.C. 2. Release of Obligations. 2.1 By Roberts. (a) Except for the Company's obligations set forth herein and subject to the Company fulfilling its obligations as set forth herein, Roberts, for and in consideration of the undertakings set forth herein, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company and its subsidiaries, component and affiliated entities, individually and collectively, its and their respective officers, directors, employees and agents (including but not limited to Frederick A. Moran, Clayton F. Moran, Joan Moran, Anthony DeJesus, Louis D. Frost, Charles Mulloy, Dr. Hussein Elkholy, James Dittman, Leonard Hausman, William Zimmerling, James Glenn, and Robert Warner), and its and their predecessors, successors and assigns, heirs, executors and administrators, of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, which Roberts ever had, now has, or hereafter may have, or which his heirs, executors or administrators hereafter may have by reason of any matter, cause or thing whatsoever from the beginning of the world to the Date of this Agreement and, particularly, but without limitation of the foregoing terms, any claims concerning or relating in any way to Roberts' status as an employee, officer or director of the Company or VDC Bermuda, or any of its subsidiaries, or to Roberts' employment relationship and/or the termination of his employment relationship with the Company and/or its predecessors, 3 component and/or affiliated corporate entities including, but not limited to, any claims which have been or could have been asserted, or could be asserted now or in the future against the Company and/or its trustees, officers, directors, employees and agents including any claims arising under any and all federal, state or local statutory or common laws including, but not limited to, any claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss. 2000e, Age Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq., the Americans with Disabilities Act, 42 U.S.C. ss. 12101, et seq., the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001, et seq., any contract with the Company or its subsidiaries, and any and all other claims arising out of Roberts' employment at the Company and termination thereof, including any claims for counsel fees and costs. It is expressly understood and agreed that this Agreement shall operate as a clear and unequivocal waiver by Roberts of any claim for accrued or future wages, benefits or any other type of payment. (b) Roberts further agrees and covenants that neither he, nor any person, organization or other entity on his behalf, will file, charge, claim, sue or cause or permit to be filed, charged or claimed any action for legal or equitable relief (including damages, injunctive, declaratory, monetary or other relief) involving any matter related in any way whatsoever to Roberts' employment relationship with the Company or VDC Bermuda or involving any continuing effects of any acts or practices which may have arisen or occurred during Roberts' employment relationship or thereafter in connection with the termination of his employment relationship with the Company or VDC Bermuda. (c) This Agreement does not prevent Roberts from filing a charge of discrimination with the Equal Employment Opportunity Commission, although by signing this Agreement Roberts waives his right to recover any damages or other relief in any claim or suit brought by or through the Equal Employment Opportunity Commission or any other state or 4 local agency on his behalf under any federal or state discrimination law, except where prohibited by law. Roberts agrees to release and discharge the Company not only from any and all claims which he could make on his own behalf but also specifically waives any right to become, and promises not to become, a member of any class in any proceeding or case in which a claim or claims against the Company may arise, in whole or in part, from any event which occurred as of the Date of this Agreement. Roberts agrees to pay for any legal fees or costs incurred by the Company as a result of any breach of the promises in this paragraph. The parties agree that if Roberts, by no action of his own, becomes a mandatory member of any class from which he cannot, by operation of law or order of court, opt out, he shall not be required to pay for any legal fees or costs incurred by the Company as a result. 2.2 By the Company. (a) Except for the Roberts's obligations set forth herein and subject to the Roberts fulfilling his obligations as set forth herein, the Company, for and in consideration of the undertakings set forth herein, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE Roberts and his heirs, executors and administrators, of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, which the Company ever had, now has, or hereafter may have, or which its successors or assigns hereafter may have by reason of any matter, cause or thing whatsoever from the beginning of the world to the Date of this Agreement and, particularly, but without limitation of the foregoing terms, any claims concerning or relating in any way to Roberts' status as an employee, officer or director of the Company or VDC Bermuda, or any of its subsidiaries, or to Roberts' employment relationship and/or the termination of his employment relationship with the Company and/or its predecessors, component and/or affiliated corporate 5 entities including, but not limited to, any claims which have been or could have been asserted, or could be asserted now or in the future against Roberts or his heirs, executors and administrators including any claims arising under any and all federal, state or local statutory or common laws. (b) The Company also agrees that it will not file any claim for legal or equitable relief against Roberts for any matter related in any way whatsoever to Roberts' employment relationship with the Company or involving any continuing effects of any acts or practices which may have arisen or occurred during Roberts' employment relationship or thereafter in connection with the termination of his employment relationship with the Company or VDC Bermuda. This provision, however, is not intended to restrict the Company's ability to cooperate in any manner it deems appropriate with any enforcement agency with any analysis, investigation or prosecution related in any way to Roberts' employment with the Company or VDC Bermuda. 3. Non-Competition and Confidentiality. (a) Roberts agrees, that for and in consideration of compliance by the Company of the mutual covenants and premises contained herein, for a period of two (2) years after the date hereof, he shall not directly or indirectly: (i) engage in or carry on any business or in any way become associated with any business which is similar to or is in competition with the Business of the Company (as such term is used and defined below); (ii) solicit the business of any person or entity, on behalf of himself or any other person or entity, which is or has been at any time during the term of the Employment Agreement a material customer or material supplier of the Company including, but not limited to, former or present customers or suppliers with whom Roberts has had personal contact during, or by reason of, his relationship with the Company; (iii) be or become an employee, agent, consultant, representative, director or officer of, or be otherwise in any manner associated with, any person, firm, corporation, association or 6 other entity which is engaged in or is carrying on any business which is similar to or in competition with the Business of the Company; (iv) solicit for employment or employ any person employed by the Company or VDC Bermuda at any time during the 24-month period immediately preceding such solicitation or employment; or (v) be or become a shareholder, joint venturer, owner (in whole or in part), partner, or be or become associated with or have any proprietary or financial interest in or of any firm, corporation, association or other entity which is engaged in or is carrying on any business which is similar to or in competition with the Business of the Company. Notwithstanding the preceding sentence above, passive equity investments by Roberts of $25,000 or less in any entity or affiliated group of any entity which is engaged in or is carrying on any business which is similar to or in competition with the Business of the Company, shall not be deemed to violate this Paragraph 3. As used in this Agreement, the term "Business of the Company" shall include all material business activities in which the Company is engaged now which consists of (i) telecommunications gateways in the United States, Nicaragua, Hong Kong, Egypt, Costa Rica, Honduras, El Salvador, South Korea, Russia and Poland; (ii) international and domestic long distance telecommunications services in the United States, Nicaragua, Hong Kong, Egypt, Costa Rica, Honduras, El Salvador, South Korea, Russia and Poland; and (iii) prepaid telephone calling cards. (b) Roberts acknowledges that the restrictions contained herein in view of the nature of the business in which the Company is and has been engaged, and in consideration of the financial value of the settlement provisions of Paragraphs 4 and 5 hereof, are reasonable and necessary to protect the legitimate interests of the Company, and that any violation of any of these restrictions would result in irreparable injury to the Company. Roberts acknowledges that, in the event of a violation of any of these restrictions, the Company shall be entitled to 7 preliminary and permanent injunctive relief as well as an equitable accounting of all earnings, profits and other benefits arising from such violation which rights or remedies shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. In the event that Roberts shall engage, directly or indirectly, in any business in competition with the business of the Company, the period of non-competition referred to above shall be extended by a period of time equal to that period beginning when such violation commenced, and ending when the activities constituting such a violation shall have finally been terminated in good faith. (c) In addition, Roberts shall not disclose Confidential Information of or about the Company, VDC Bermuda, VDC Telecommunications, Inc., Voice & Data Communications (Hong Kong) Limited, Masatepe Communications, U.S.A., L.L.C., Masatepe Communiciones S.A., World Connect and their subsidiaries and affiliates to any other person, entity, corporation, trust, association or partnership. For the purposes of this Agreement, the term "Confidential Information" shall include, without limitation, information obtained while Roberts was employed by the Company or VDC Bermuda as an officer or director or in any other capacity, relating to the Company's financial condition, its systems, know-how, designs, formulas, processes, devices, patents (pending or otherwise), inventions, research and development, projects, technologies, communications with third parties such as governmental agencies, customers or suppliers, methods of doing business, agreements with customers or suppliers or other aspects of the Business of the Company which information is generally not available outside of the Company to persons who are not authorized to have such information or which information is otherwise treated as confidential or which is sufficiently secret to derive economic value from not being disclosed. 8 (d) Notwithstanding anything to the contrary contained herein, in the event that any court of equity determines that the time period and/or scope of this restrictive covenant is held to be unenforceably long or broad, as the case may be, then, and in either such event, neither the enforceability nor the validity of this paragraph as a whole shall be affected. Rather, the time period and/or scope of the restriction as affected shall be reduced to the maximum permitted by law. 4. Consideration. 4.1 Severance Pay and Medical Benefits. The Company shall: (a) pay Roberts the amount of $5,208.34, less any state, local and federal withholding, employment or income taxes payable with respect thereto, payable on each of the following dates: November 30, 1998, December 15, 1998, and December 30, 1998. This total gross sum of $15,625.02 represents payment of Roberts' annual salary of $125,000 as set forth in the Employment Agreement for the period commencing as of November 16, 1998 and ending December 30, 1998; and (b) at its own expense, from the period commencing November 19, 1998 through December 31, 1998, maintain Roberts as a participant in his current major medical or group health insurance plan. 4.2 Transfer, Surrender and Conversion of Stock. (a) Upon the execution of this Agreement by Roberts and the Company, Roberts, as settlor and co-trustee of The Roberts Family Trust (the "Trust"), shall deliver to the Company: (x) VDC Corporation Ltd. Stock Certificate Number VDC1635, representing 1,512,500 shares of common stock of VDC Corporation Ltd. in the name of the Trust (the "VDC Corp. Shares") (which by virtue of the Domestication Merger are exchangeable for 1,512,500 9 shares of common stock of the Company); and (y) a stock power duly executed disposing of the VDC Corp. Shares upon the following terms: (i) 637,500 of the VDC Corp. Shares shall be exchanged for Company common stock and issued in the name of the Company (the "First Series Shares"); (ii) 700,000 of the VDC Corp. Shares shall be exchanged for Company common stock and issued in the name of the Trust (the "Trust Shares"); (iii) 125,000 of the VDC Corp. Shares shall be exchanged for Company common stock and issued in the name of Frederick A. Moran (the "Payment Shares"), and (iv) 50,000 of the VDC Corp. Shares shall be exchanged for Company common stock and issued in the name of the Trust (the "Additional Consulting Fee Shares"). The First Series Shares shall be delivered and surrendered to the Company within twenty (20) business days of the Date of this Agreement. The Trust Shares shall be delivered to Roberts within twenty (20) business days of the Date of this Agreement. The Payment Shares and Additional Consulting Fee Shares shall be delivered to Moran within twenty (20) business days of the Date of this Agreement. (b) Upon the execution of this Agreement by Roberts and the Company, Roberts, as settlor and co-trustee of the Trust, shall deliver to the Company a duly executed stock power transferring to the Company the 1,237,500 shares of the Company preferred stock owned by the Trust (which by virtue of the Domestication Merger are convertible into 1,237,500 shares of the Company's common stock) represented by stock certificate number PB7 of VDC (Delaware), Inc. (n/k/a VDC Communications, Inc.). Said shares shall be converted into 10 Company common stock and delivered and surrendered to the Company within twenty (20) business days of the Date of this Agreement. (c) Of the 700,000 Trust Shares, the parties hereby agree that 50,000 of the Trust Shares shall be payment for Advisory Services (as defined below) in accordance with Paragraph 6.1(a)(i). In addition to any restrictions on the sale, offering or transfer of the Trust Shares pursuant to federal or state securities laws, the Trust Shares shall be subject to certain restrictions as set forth in Paragraphs 4.2(d) and 4.2(f). As such, all stock certificates for the Trust Shares shall bear the following restrictive legend: The Shares represented by this certificate are subject to a Settlement, Release and Discharge Agreement dated November 19, 1998, by and among James C. Roberts, VDC Communications, Inc., and Frederick A. Moran, and may not be transferred or encumbered except in accordance with the terms of that Agreement. (d) Subject to the condition set forth in Paragraph 4.2(e), Roberts covenants that none of the Trust Shares shall be sold by the Trust, Roberts or any other person or entity until the one year anniversary of the Date of this Agreement; provided, however, that a sale of the Trust Shares by a brokerage or securities firm pledgee of such shares during the one year period following the Date of this Agreement shall not be considered a breach of this Paragraph if such sale is made as a result of a foreclosure or margin call of such shares by said pledgee. Roberts further covenants that during the one year period following the Date of this Agreement: (x) neither the Trust nor Roberts, nor any person or entity on their behalf, shall margin more than 300,000 Trust Shares; (y) the Trust, Roberts, and any person or entity on their behalf, shall margin the Trust Shares only with brokerage and securities firms ("Selected Firms") that are willing to lend funds at the rate of 40% or greater of the aggregate value, calculated as set forth below on the day the Trust Shares are margined with the respective Selected Firm, of the Trust 11 Shares margined with a Selected Firm; and (z) that during the one year period following the Date of this Agreement, neither the Trust nor Roberts, nor any person or entity on their behalf, shall margin the Trust Shares for more than 25% of the aggregate value, calculated as set forth below on the day the Trust Shares are margined with the respective Selected Firm, of the Trust Shares margined with the respective Selected Firm. For the purposes of this Paragraph, the value of a Trust Share on a given day shall be determined as follows: (A) if the Company's common stock is traded in the over-the-counter market and not on any national securities exchange nor in the NASDAQ Reporting System, the value shall be the last bid price per share, as reported by the National Quotation Bureau, Inc. or an equivalent generally accepted reporting service, for the most recent trading day, or if not so reported, the closing bid price for a share of the Company's common stock for the most recent trading day as furnished to the Company by any member of the National Association of Securities Dealers, Inc., selected by the Company for that purpose; or (B) if the Company's common stock is traded on a national securities exchange or in the NASDAQ Reporting System, the value shall be the closing price at which a share of the Company's common stock traded, as quoted on a national or other major stock exchange or the NASDAQ Reporting System for the most recent trading day. (e) The restrictions and covenants set forth in Paragraph 4.2(d) hereof shall immediately terminate if the market price of Company common stock is $7.00 or more on at least 30 trading days during any 120 consecutive trading day period following the Date of this Agreement. For the purposes of this Paragraph, the market price of a share of Company common stock on a given day shall be determined as follows: (A) if the Company's common stock is traded in the over-the-counter market and not on any national securities exchange nor in the NASDAQ Reporting System, the market price shall be the last bid price per share, as reported by 12 the National Quotation Bureau, Inc. or an equivalent generally accepted reporting service, for the most recent trading day, or if not so reported, the closing bid price for a share of the Company's common stock for the most recent trading day as furnished to the Company by any member of the National Association of Securities Dealers, Inc., selected by the Company for that purpose; or (B) if the Company's common stock is traded on a national securities exchange or in the NASDAQ Reporting System, the market price shall be the closing price at which a share of the Company's common stock traded, as quoted on a national or other major stock exchange or the NASDAQ Reporting System for the most recent trading day. (f) If the restrictions and covenants set forth in Paragraph 4.2(d) are terminated in accordance with Paragraph 4.2(e), then, in addition to any restrictions on the sale, offering or transfer of the Trust Shares pursuant to federal or state securities laws, the resale of the Trust Shares shall be subject to the following restrictions: (i) 33% of the Trust Shares may be sold, offered or transferred immediately; (ii) 33% of the Trust Shares may not be sold, offered or transferred until the six month anniversary of the Date of this Agreement; and (iii) 34% of the Trust Shares may not be sold, offered or transferred until the twelve month anniversary of the Date of this Agreement. Notwithstanding the restrictions in this Paragraph 4.2(f), a sale of shares pledged in accordance with Paragraph 4.2(d) by a brokerage or securities firm pledgee shall not be considered a breach of this Paragraph if such sale is made as a result of a foreclosure or margin call of such shares by said pledgee. 13 (g) For thirty (30) days from the Date of this Agreement, the Company shall provide Roberts with whatever reasonable assistance is necessary to permit Roberts to pledge his Company stock in accordance with the terms of this Paragraph 4.2; said assistance may include reasonable modifications on the restrictions contained in this Paragraph 4.2. (h) Stock certificates representing the Payment Shares and the Additional Consulting Fee Shares shall be delivered to Moran who shall hold the Payment Shares and the Additional Consulting Fee Shares in escrow to be disbursed pursuant to the terms hereof. The Payment Shares (consisting, in part, of 100,000 shares of VDC Corporation Ltd. common stock that Roberts had previously pledged to Moran and Joan Moran (the "Pledge") to secure the Residential Loan (as defined below)) shall be disbursed in accordance with the provisions of Paragraph 5.2 hereof to satisfy certain obligations of Roberts, and the Additional Consulting Fee Shares shall be disbursed, in accordance with the terms of Paragraph 6.1, to compensate Roberts for providing consulting services to the Company as set forth in Paragraph 6.1. (i) Roberts hereby agrees that Moran will hold the Payment Shares and Additional Consulting Fee Shares in escrow, Moran hereby agrees to hold and disburse such shares, and the remaining parties hereto agree to such arrangement. (ii) Moran shall not be under any duty to give the property held by him hereunder any greater care than it gives its own similar property. (iii) Moran may act in reliance upon advice of counsel in reference to any matter connected herewith, and shall not be liable for any mistake of fact or error of judgment. (iv) Moran shall have the right to vote all shares held in escrow. 14 (v) The Company, Roberts and the Roberts Family Trust, and their respective employees, representatives, agents, heirs, beneficiaries, successors and assigns, hereby waive any suit, claim, demand or cause of action of any kind which any of them may have or may assert against Moran arising out of or relating to the execution or performance by Moran of this Agreement. The Company, Roberts and the Roberts Family Trust hereby irrevocably covenant not to sue or commence or join in any proceedings, whether legal, equitable or otherwise, against Moran on account of any act or omission to act on the part of Moran. Further, to induce Moran to act hereunder, Roberts and the Roberts Family Trust hereto agree to hold Moran harmless from any liability incurred by any action taken or omission by Moran. 5. Cancellation of Loan - Return of Securities - Tower Lease 5.1 The Company shall forgive the indebtedness owed to it by Roberts under that certain Promissory Note, dated December 8, 1997, in the original principal amount of $164,175, made in connection with the Subscription Agreement, dated December 8, 1997, between Roberts and Sky King Communications, Inc. (predecessor-in-interest to the Company). 5.2 Moran shall hold the Payment Shares and the proceeds derived from the sale thereof in escrow pursuant to the terms hereof and shall dispose of the Payment Shares as follows: (a) Each of the parties hereto authorizes Moran to sell as soon as is practicable and judicious, in the sole discretion of Moran, that number of Payment Shares Moran determines, in his sole discretion, is necessary in order to repay a loan of approximately $270,000 made by Frederick A. and Joan B. Moran, husband and wife, to Roberts in connection with the lease and/or purchase of a residence (the "Residence") in Greenwich, Connecticut by Roberts (the "Residential Loan"); 15 (b) Each of the parties hereto authorizes Moran to sell that number of Payment Shares Moran determines, in his sole discretion, is necessary to repay a loan in the original principal amount of $5,000 made by Frederick A. Moran to Roberts on the date hereof for moving expenses (the "Moving Loan"). (c) Each of the parties hereto authorizes Moran to sell, as soon as is practicable and from time to time, that number of Payment Shares Moran determines, in his sole discretion, is necessary to satisfy certain of Roberts' rental or lease obligations associated with the Residence which obligations consist solely of monthly rental payments of approximately $18,000 for the six month period following the Date of this Agreement, which rental obligations shall equal approximately $108,000 in the aggregate (the "Rental Obligation"). (d) Each of the parties hereto authorizes Moran to sell that number of Payment Shares Moran determines, in his sole discretion, is necessary to reimburse any expenses incurred by the Company and/or VDC Bermuda in connection with expediting the consummation of the Domestication Merger between the Company and VDC Bermuda on behalf of Roberts, which expenses include but are not limited to, expedited fees for filing the certificate of merger with the Secretary of State of Delaware and courier and postal fees for documents related to the Domestication Merger (the "Merger Expedition Fees"); (e) Moran shall apply the proceeds from the sale of the Payment Shares first to the repayment of the Residential Loan; second, to the repayment of the Moving Loan; third, to reimbursement of the Company for the Merger Expedition Fees; and fourth, to the satisfaction of the Rental Obligation. (f) Upon the satisfaction in full of the Residential Loan, the Lease Obligations, the Merger Expedition Fees and Moving Loan as set forth herein, the parties hereby 16 authorize Moran to distribute the remaining Payment Shares (the "Remaining Payment Shares") as follows: (i) If there are more than 25,000 Remaining Payment Shares, Moran shall be entitled to any Remaining Payment Shares in excess of 25,000 as satisfaction of the Moran Loans; provided, however, that in no event shall such shares be distributed to Moran until January 1, 1999. Moran shall surrender the 25,000 Remaining Payment Shares to the Company for cancellation on the Company's books and records. (ii) If there are 25,000 or fewer Remaining Payment Shares, Moran shall surrender the said Remaining Payment Shares to the Company for cancellation on the books and records of the Company. 5.3 The Company agrees to indemnify and hold Roberts harmless against any liability of Roberts arising under the Agreement of Lease between Tower Realty Operating Partnership, L.P. and VDC Bermuda, dated July, 1998 (the "Tower Lease") and Roberts' Good Guy Guaranty of the Tower Lease. The Company shall use diligent and good faith efforts to release Roberts from his Good Guy Guaranty of the Tower Lease. 6. Affirmative Covenants. 6.1 Advisory Services. (a) For a period of twenty-four months from the date hereof, Roberts agrees to provide advisory services (the "Advisory Services") on a limited basis, to, or on behalf of, the Company as set forth below. As compensation for providing these services, Roberts shall be entitled to the following: 17 (i) 50,000 shares of Company common stock (which shall be issued as part of the 700,000 Trust Shares), for Advisory Services to be rendered during the first 12 months; and (ii) 50,000 of Additional Consulting Fee Shares on the twelve month anniversary of the Date of this Agreement for Advisory Services to be rendered during the second 12 months. All of the Additional Consulting Fee Shares shall be subject to the same restrictions as the Trust Shares as set forth in Paragraphs 4.2(d) and 4.2(f). (b) Roberts shall be required to respond to telephonic inquiries of employees or officers of the Company, particularly the C.E.O., and to otherwise provide general assistance in connection with business matters as they relate to the Company. (c) Roberts shall cooperate with the Company in connection with confirming matters or providing information relative to matters for which he had principal responsibility while in the employ of the Company. (d) Roberts will cooperate with the Company's auditors in connection with the preparation of financial statements. (e) On most occasions Roberts may provide such assistance or confirmation telephonically; however, he may on an occasional basis be required to meet personally with Company personnel at the offices of the Company or in the general surrounding area, or be requested to provide confirmations to third parties. (f) The Company shall reimburse Roberts for any out-of-pocket expenses, preapproved by the Company in writing, incurred by Roberts in rendering Advisory Services. 18 6.2 Return of Company Materials. Roberts has, or will upon the execution hereof, deliver to the Company any and all Company property in his possession or under his control. For the purpose of this paragraph, the term "property" means all files, memoranda, minutes of Board meetings, employee files, documents, papers, agreements, keys, credit cards, items, records, computer hardware, computer software, computer apparatus, items of personal property, machinery and equipment or other materials, that belong to the Company, were taken from the premises of the Company or were purchased with funds or in the name of the Company. The Company may, at the request of Roberts, make copies of certain non-confidential files of a personal nature that he may retain for his records. 6.3 Full and Complete Accounting; Responsibility for Expenses. (a) Roberts agrees to reimburse the Company for all personal expenses incurred by the Company on his behalf since March 6, 1998, and to henceforth refrain from charging any items of personal expense to the account of the Company. Roberts shall immediately return the two (2) Sprint cellular telephones the Company has permitted Roberts to use and all unused DHL envelopes. Any other personal expenses incurred by the Company on behalf of Roberts, since March 6, 1998, shall be offset on a pro-rata basis against the remaining payments of consideration set forth at Paragraph 4.1 hereof. Prior to offset, however, the Company shall provide Roberts with reasonable notice of any such items in question so that Roberts may designate the character of such terms. To the extent that any of the items to be offset exceed the total amount of consideration due hereunder, Roberts shall immediately reimburse the Company for such amounts. To the extent that Roberts and the Company cannot 19 agree on the nature or amount of an expense in question, they agree to submit the matter to arbitration in the manner provided for at Paragraph 9 hereunder. 6.4 Roberts agrees that he shall not make or publish, or assist anyone else to make or publish, any negative, critical, disparaging, slanderous, or libelous statements about the Company or its subsidiaries or any of their respective officers, directors, agents, employees, or representatives, and unless (and then only to the extent) required by law, shall not disclose the terms and provisions of the Agreement to any third party without the Company's consent. Roberts agrees that he will provide no assistance, advisory services or efforts to any third parties in connection with any disputes, claims or legal proceedings between such third parties and the Company. 6.5 The Company agrees that neither it nor its officers, directors, agents, employees, or representatives shall make or publish any negative, critical, disparaging, slanderous, or libelous statements about Roberts, and unless (and then only to the extent) required by law, shall not disclose the terms and provisions of this Agreement to any third party, without Roberts' consent. The Company agrees that it will provide no assistance or advisory services (unless required by law) to any third parties in connection with any disputes between such third parties and Roberts. 6.6 Roberts agrees to execute and deliver any documents or make any representation reasonably required by the Company in order to facilitate the termination of Roberts' employment with the Company. 6.7 Roberts agrees to serve as a witness for the Company, and otherwise assist and cooperate with the Company, in any dispute between the Company, or its subsidiaries, and BDO Seidman, or its subsidiaries, affiliates or divisions. The Company shall reimburse Roberts 20 for any out-of-pocket expenses, preapproved by the Company in writing, incurred by Roberts in serving as a witness for the Company or otherwise assisting or cooperating with the Company, in any dispute between the Company, or its subsidiaries, and BDO Seidman, or its subsidiaries, affiliates or divisions. 6.8 Roberts covenants and agrees to indemnify, defend and hold harmless the Company and each of its shareholders, officers, directors, employees, attorneys, and/or agents, individually and collectively (the "Indemnified Parties"), against and in respect of any claim, liability, loss, cost, damage or expense (including attorneys' fees and costs of investigation incurred in defending against or settling any such claim, liability, loss, cost, damage or expense, and any amounts paid in settlement thereof) imposed on, incurred or sustained by the Company and/or the Indemnified Parties as a result of any inaccuracy or breach of Roberts' representations and warranties set forth in Paragraph 7 or the subsections thereof or any breach of any obligations of Roberts under this Agreement. 7. Representations and Warranties of Roberts. Roberts does hereby provide the following representations and warranties to the Company and the Company does hereby rely upon the accuracy and truthfulness of such representations and warranties for the purpose of this Agreement. 7.1 Roberts has delivered, or will upon the execution hereof, deliver to the Company any and all files, memoranda, documents, records, employee files, minutes of Board meetings, keys, credit cards, items of personal property, computer hardware, software or other apparatus, machinery or equipment, or any other materials which belong to the Company or were paid for with Company funds, which Roberts has in his possession or control, which he knows 21 are in the possession or control of his spouse or which were removed from the premises of the Company by him or his spouse. 7.2 He knows of no action or failure to act on the part of the Company (including its directors, officers, employees and other agents and representatives) condition, event, occurrence or the like, which could form the basis for a claim or complaint against the Company, its subsidiaries or other entities or individuals described above, by any third party and has not committed or contracted the Company to any obligations. 7.3 Roberts has not during the term of his employment, alone or with others, disclosed to third parties, without the knowledge or permission of the Company, Confidential Information about the Company, its technologies, formulations, customers, or suppliers, nor has he undertaken any act or omission to act in a manner which breaches Paragraph 7 of his employment agreement, which was effective during the term of his employment, nor has he knowingly misrepresented the Company to any entity. 7.4 Roberts agrees that he shall not represent to any individual or entity that he or any of his family members is an officer or director of the Company. Furthermore, Roberts agrees that he shall not represent to any third party that he has the authority or ability to execute contracts or other documents or make decisions or take actions on behalf of the Company, any of its subsidiaries or any of their respective officers, directors, employees or agents. 7.5 The Rental Obligation, described more particularly in Paragraph 5.2(c), does not exceed, in the aggregate, $108,000. 7.6 Roberts and Lynne Roberts, as Co-Trustees of the Trust, have the sole requisite authority to execute this Agreement on behalf of the Trust and bind the Trust thereto. 22 The foregoing representations and warranties shall be deemed to be in the nature of an obligation of Roberts in so far as the falsehood of same shall be deemed to be a breach by Roberts of his obligations hereunder. 8. Standstill Provision. For and in consideration of the mutual covenants and premises contained herein, during the term of this Agreement, and for a period of one (1) year thereafter, (which period shall lapse in the event of the breach of this Agreement by the Company), neither Roberts nor any family member (defined for this purpose to include his spouse and children) or company, partnership or trust in which Roberts (or such family member) owns five (5%) percent or more of its equity or voting interests or for which Roberts serves as an employee, agent, officer, director or partner will: (i) for the purposes of subparagraphs (ii) or (iii) hereafter, acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect rights or options to acquire any voting securities of the Company; (ii) make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" to vote (as such terms are interpreted in the proxy rules of the Securities and Exchange Commission), or seek to advise or influence any person or entity with respect to the voting of any voting securities of the Company, or (iii) form, join or in any way participate in a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with respect to any voting securities of the Company for the purpose of seeking to control the management, Board of Directors or policies of the Company. Further, the parties acknowledge that the Company would not have an adequate remedy at law for money damages in the event that this covenant were not performed in accordance with its terms and therefore Roberts agrees that the Company shall be 23 entitled to specific enforcement of the terms hereof in addition to any other remedy to which it may be entitled, at law or in equity. 9. Arbitration. Any dispute between the parties hereunder shall be determined by binding arbitration applying the laws of the State of Connecticut. Any arbitration pursuant to this Agreement shall be conducted in Stamford, Connecticut before the American Arbitration Association in accordance with its arbitration rules. The arbitration shall be final and binding upon all the parties (so long as the award was not procured by corruption, fraud or undue means) and the arbitrator's award shall not be required to include factual findings or legal reasoning. Nothing in this Paragraph 9 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 injuries to one of the parties, and the parties hereto agree that the federal and state courts located in Stamford, Connecticut shall have exclusive subject matter and in personam jurisdiction over the parties and any such claims or disputes arising from the subject matter contained herein. 10. Notice. Any notice, demand, or communication given in connection with this Agreement shall be in writing and shall be deemed received (a) when delivered if given in person or by courier or courier service, or (b) on the date and at the time of transmission if sent by facsimile (receipt confirmed) or (c) five (5) business days after being deposited in the mail postage prepaid. 24 11. Applicable Law. This Agreement shall be construed in accordance with the laws of the State of Connecticut without regard to principles of conflict of laws. 12. Entire Agreement. This instrument contains the entire agreement of the parties. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 13. Rule of Construction. No rule of construction requiring interpretation against the drafting party shall apply to the interpretation of this Agreement. 14. Agreement Read and Understood. Both parties hereto acknowledge that they have had an opportunity to consult with an attorney regarding this Agreement and that they, or their designated agents, have read and understand this Agreement. 15. Review and Revocation Period. Roberts acknowledges that he has been informed that he has the right to consider this Agreement for a period of at least twenty-one (21) days prior to entering the Agreement. He also understands that he has the right to revoke this Agreement for a period of seven (7) days following his execution of the Agreement by giving written notice to the Chief Executive Officer of the Company at its principal offices. Such notice shall be effective upon receipt by the Company's Chief Executive Officer. 16. Signatures in Counterpart and Facsimile. This Agreement may be executed in multiple counterparts and by facsimile signature, each of which shall constitute an original, but all of which counterparts taken together shall constitute one and the same instrument. 25 IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. ATTEST: VDC COMMUNICATIONS, INC. /s/ Louis D. Frost By: /s/ Frederick A. Moran - ------------------ -------------------------- Frederick A. Moran, C.E.O. WITNESS: /s/ Lynne Roberts /s/ James C. Roberts - ------------------ --------------------- James C. Roberts WITNESS: /s/ Louis D. Frost /s/ Frederick A. Moran - ------------------ ----------------------- Frederick A. Moran Accepted and agreed this 19th day of November, 1998 THE ROBERTS FAMILY TRUST By: /s/ James C. Roberts -------------------- Dr. James C. Roberts, Co-Trustee By: /s/ Lynne Roberts ----------------- Lynne Roberts, Co-Trustee 26 EX-10.2 3 SETTLEMENT AGREEMENT SETTLEMENT AGREEMENT This Settlement Agreement (the "Agreement") is entered as of this 24th day of November, 1998, between VDC Communications, Inc. (successor to VDC Corporation, Ltd.) ("VDC"), PortaCom Wireless, Inc. ("PortaCom") and Michael Richards (the "Disbursing Agent"). VDC and PortaCom may sometimes be collectively referred to herein as the "Settling Parties." BACKGROUND A. On March 23, 1998 (the "Filing Date"), PortaCom filed a voluntary petition for reorganization pursuant to Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), Case No. 98-661(PJW) (the "Bankruptcy Case"). B. Prior to the commencement of the Bankruptcy Case, on September 30, 1997, VDC entered into an agreement with PortaCom to acquire PortaCom's interest in Metromedia China Corporation ("MCC"), consisting of 2,000,000 shares of MCC common stock ("MCC Shares") and warrants to purchase 4,000,000 shares of MCC common stock with a strike price of $4.00 per share ("MCC Warrants"), in consideration of VDC's issuance of 5.3 million shares of VDC common stock (the "VDC Shares") and up to $700,000 in cash ("1997 Sale Agreement"). The 1997 Sale Agreement was superseded by the Asset Purchase Agreement dated March 23, 1998 ("Asset Purchase Agreement"). C. The Asset Purchase Agreement was subsequently amended by two Stipulations and Orders in Lieu of Objection, dated as of April 3, 1998 and April 23, 1998, respectively and by an Escrow Agreement ("Escrow Agreement"), which provided for an escrow account in the amount of $2,682,000 funded by VDC (the "Escrowed Funds"), subject to adjustment, for the holders of priority and general unsecured claims against PortaCom. D. Pursuant to the Bankruptcy Court's Order entered April 23, 1998, the sale of the MCC Shares and MCC Warrants to VDC was approved pursuant to Bankruptcy Code ss. 363. E. On or about June 8, 1998, the sale of the MCC Shares and MCC Warrants to VDC was consummated (the "Asset Sale"). F. On or about July 24, 1998, PortaCom filed an Amended Plan of Reorganization as Modified ("Plan") and accompanying Disclosure Statement. Attached to the Plan was a June 8, 1998 Memorandum of Understanding (the "MOU") which further amended the Asset Purchase Agreement. G. By Order dated September 17, 1998, this Court confirmed the Plan ("Confirmation Order"). The Plan was confirmed pursuant to Bankruptcy Code ss. 1129(a) and without objection. H. Following the entry of the Confirmation Order, but prior to the time that the Confirmation Order became final, VDC raised allegations that a fraud may have been committed against it in connection with the execution of the 1997 Sale Agreement, the Asset Purchase Agreement and the Asset Sale. In connection with such allegations, VDC filed a motion for reconsideration and for a stay of the Confirmation Order (the "Reconsideration Motion"). I. On October 20, 1998, VDC, PortaCom and the Official Committee of Unsecured Creditors of PortaCom Wireless, Inc. (the "Committee") entered into a stipulation dated October 20, 1998 (the "October 20 Stipulation") pursuant to which PortaCom agreed to defer distribution of a portion of the VDC Shares under the Plan and VDC agreed to withdraw the Reconsideration Motion. The October 20 Stipulation was approved by the Bankruptcy Court on October 20, 1998. By operation of the October 20 Stipulation, the Confirmation Order became final and unappealable. 2 J. Following the execution and approval of the October 20 Stipulation, VDC restated its intention to pursue its allegations of fraud and to rescind, in whole or in part, the Asset Sale. K. In order to avoid the expenses and risks associated with litigating the disputes which have arisen between VDC and PortaCom, the Settling Parties wish to settle the disputes between them in full. COVENANTS NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Settling Parties, intending to be bound legally hereby, covenant and agree as follows: 1. Escrow Shares. (a) As soon as practicable after the execution of this Agreement, the Disbursing Agent shall segregate and hold separately certificates representing shares of VDC common stock (the "Escrow Shares"), consisting of a portion of the "First Series" and "Second Series" shares (as defined in the MOU) not disbursed pursuant to the Plan to creditors of PortaCom holding Allowed Claims in Classes 1, 2 or 5 (as defined in the Plan) ("Allowed Claimants"), for release by the Disbursing Agent in accordance with the terms hereof. The "Third Series" shares (as defined in the MOU) are pledged to MCC under the Pledge Agreement dated June 8, 1998 (the "Pledge Agreement"). At such time as the Third Series shares are returned to the Escrow Agent (as defined in the Plan) in accordance with the Pledge Agreement, the Settling Parties shall direct the Escrow Agent to deliver the Third Series shares to the Disbursing Agent and the Disbursing Agent shall substitute 2,000,000 of the Third Series shares for the First Series and Second Series shares deposited hereunder. Thereafter, such Third Series shares shall constitute the Escrow Shares. If 3 there are less than 2,000,000 Third Series shares available for delivery to the Disbursing Agent, Second Series shares equal to the shortfall shall be retained by the Disbursing Agent. All First Series and Second Series shares originally deposited hereunder and exchanged for Third Series shares shall be retained by the Disbursing Agent for disposition pursuant to the Plan. (b) Notwithstanding the foregoing subsection (a), the Settling Parties agree that the Disbursing Agent may remove from the Escrow Shares such First Series or Second Series shares as may be required to permit PortaCom to (i) fund administrative expenses payable to Allowed Claimants under the Plan, (ii) satisfy or reserve for post-confirmation operating expenses of PortaCom, and (iii) fund the reserve for post-confirmation professional fees as provided in Section 5.10 of the Plan. 2. Deliveries of Escrow Shares to PortaCom. The Disbursing Agent shall deliver all or a portion of the Escrow Shares (as described below) to PortaCom at any time during the eighteen (18) months commencing November 1, 1998 (the "Escrow Period") upon the satisfaction of any of the conditions set forth below. Where less than all Escrow Shares are delivered, Escrow Shares of the Second Series, if any, shall be delivered before Escrow Shares of the Third Series. (a) All Escrow Shares shall be delivered if any of the following occurs during the Escrow Period: (i) MCC completes an initial public offering of shares of its common stock (the "MCC Stock") at a public offering price per share of $5.00 or more (adjusted for stock splits, reverse splits or recapitalizations occurring after the date hereof) and VDC's MCC Warrants, to the extent not exercised, remain valid and exercisable or have been canceled or otherwise terminated with VDC's consent. 4 (ii) Following a merger, share exchange or other transaction in which VDC obtains securities of another entity (the "Successor") in exchange for shares of MCC Stock, (A) either (i) any class of securities of the Successor received by VDC in such transaction, or into which securities received by VDC in such transaction are convertible (the "Successor Securities") are registered under the Securities Exchange Act of 1934 (the "1934 Act") and have an average market price per share for the five (5) trading days commencing with the trading date following the closing date of such transaction such that the Successor Securities received by VDC, or issuable upon conversion of such Successor Securities as were received by VDC, in exchange for a single share of MCC Stock (the "MCC Share Equivalent") (after adjustment for stock splits, reverse splits or recapitalizations occurring after the date hereof) provides VDC with $5.00 or more of market value for each of its MCC shares, or (ii) the Successor completes a public offering of any class of Successor Securities at a price of $5.00 or more for each MCC Share Equivalent (after adjustment for stock splits, reverse splits or recapitalizations occurring after the date hereof), (B) VDC's MCC Warrants remain valid and exercisable by VDC or have been exchanged for rights to acquire securities or property of the Successor (the "Warrant Equivalents") and (C) VDC's MCC Warrants or such rights, to the extent not exercised, remain valid and exercisable or 5 have been canceled or otherwise terminated with VDC's consent. For purposes of this clause (ii), "market price" shall be the closing price at which a share of MCC Stock or an MCC Share Equivalent, as the case may be, traded on the date in question, as quoted on the NASDAQ National Market or Small Cap Market or on a national securities exchange. (iii) (A) If VDC's MCC Warrants have expired, the MCC Stock is registered under the 1934 Act and the market price of one share of MCC Stock is $15.00 or more on at least 30 trading days during any 120 consecutive trading day period following the date of registration thereof; or (B) the Successor Securities are registered under the 1934 Act and the market price of an MCC Share Equivalent is $15.00 or more for at least 30 trading days during any 120 consecutive trading day period following the date of registration thereof. For purposes of this clause (iii), "market price" shall be the closing price at which a share of MCC Stock or an MCC Share Equivalent, as the case may be, traded on the date in question, as quoted on the NASDAQ National Market or Small Cap Market or on a national securities exchange. (b) All or a portion of the Escrow Shares shall be delivered in the event that, during the Escrow Period, VDC sells or otherwise disposes of the MCC Shares, MCC Share Equivalents, MCC Warrants or MCC Warrant Equivalents in one or more transactions and/or VDC 6 receives distributions of cash or property from MCC with respect to the MCC Shares (all amounts received by VDC are referred to collectively herein as "Proceeds") as follows: (i) 666,667 Escrow Shares if aggregate Proceeds are $21,000,000 or more; (ii) 1,333,333 Escrow Shares if aggregate Proceeds are $25,000,000 or more; and (iii) 2,000,000 Escrow Shares if aggregate Proceeds are $30,000,000 or more. For purposes of calculating Proceeds, cash and cash equivalents shall be valued at face, marketable securities shall be valued at the average closing price for the five (5) trading days commencing with the date in question as quoted on the NASDAQ National Market, the NASDAQ Small Cap Market or a national securities exchange, and all other Proceeds shall be valued at fair market value as determined by an independent qualified investment banker or appraiser acceptable to both parties, whose determination shall be binding on the parties absent manifest error. (c) All or a portion of the Escrow Shares shall be delivered based on the private equity valuation of MCC's businesses as of the end of the Escrow Period, as follows: (i) 666,667 Escrow Shares if VDC's portion of MCC's private equity valuation is $38,000,000 or more; (ii) 1,333,333 Escrow Shares if VDC's portion of MCC's private equity valuation is $65,000,000 or more; and (iii) 2,000,000 Escrow Shares if VDC's portion of MCC's private equity valuation is $83,000,000 or more. 7 "Private equity valuation" shall be determined by an independent qualified investment banker or appraiser acceptable to both parties, whose determination shall take into account a number of relevant factors including without limitation MCC's indebtedness and whose determination shall be binding on the parties absent manifest error. (d) All Escrow Shares shall be delivered immediately in the event that: (i) the market price (the closing price at which a share of VDC common stock trades on the date in question, as quoted on the NASDAQ National Market or Small Cap Market or on a national securities exchange) of a share of VDC's common stock (the "VDC Stock") is less than $5.00 on any 40 trading days during the 120 consecutive trading days subsequent to August 31, 1999; (ii) the VDC Stock is no longer traded or quoted on a national exchange or the NASDAQ National Market or Small Cap Market (unless as the result of VDC's acquisition by a successor and receipt by its shareholders of securities which are and remain traded on a national exchange or the NASDAQ National Market or Small Cap Market or VDC is acquired for consideration per share of $5.00 or more in cash or property); or (iii) VDC receives more than $2,500,000 in gross proceeds from one or more public or private offerings of VDC Stock or securities convertible into shares of VDC Stock at an aggregate average price per share of VDC Stock (or such amount of other securities as is convertible into a share of VDC Stock) of $2.625 or less, or VDC 8 issues shares of VDC Stock or securities convertible into shares of VDC Stock having a fair market value (determined in the same manner as Proceeds are valued in subsection (b) above) in excess of $2,500,000 and at an average fair market value per share of VDC Stock (or such amount of other securities as are convertible into shares of VDC Stock) of $2.625 or less. 3. Delivery of Escrow Shares to VDC. All Escrow Shares not delivered or deliverable to PortaCom as of the end of the Escrow Period under Section 2 above shall be delivered by the Disbursing Agent to VDC for cancellation. 4. The Release by VDC of PortaCom. For and in consideration of the agreements and other mutual covenants set forth in this Agreement, VDC and all of its parent corporations, subsidiaries, affiliates, officers, directors, shareholders, agents, attorneys, representatives, predecessors, successors and assigns, do hereby fully and forever remise, release, acquit and forever discharge PortaCom and its parent corporations, subsidiaries, affiliates, predecessors, successors, assigns, and all of its present and former officers, directors, shareholders, employees, agents, representatives, attorneys, insurers, and all of the foregoing's present and former officers, directors, partners, principals, employees, shareholders, trustees, attorneys, insurers, and their respective spouses, successors, heirs, executors, estates, administrators, representatives, attorneys and agents, from and against all claims, causes of action, demands, or suits of any kind, known or unknown, arising out of or related in any way to the Asset Sale, the 1997 Sale Agreement, the Asset Purchase Agreement, the Plan, the disclosure statement relating to the Plan, the MCC Shares and MCC Warrants, the VDC Shares or the Escrowed Funds that were or could have been asserted by VDC from the beginning of time through the date of execution of this Agreement. Nothing contained in 9 the foregoing release shall operate to discharge any party of its obligations under this Agreement, the Plan, the Asset Purchase Agreement, the MOU, the Escrow Agreement or the October 20 Stipulation. 5. The Release by PortaCom of VDC. For and in consideration of the agreements and other mutual covenants set forth in this Agreement, PortaCom and all of its parent corporations, subsidiaries, affiliates, officers, directors, shareholders, agents, attorneys, representatives, predecessors, successors and assigns, do hereby fully and forever remise, release, acquit and forever discharge VDC and its parent corporations, subsidiaries, affiliates, predecessors, successors, assigns, and all of its present and former officers, directors, shareholders, employees, agents, representatives, attorneys, insurers, and all of the foregoing's present and former officers, directors, partners, principals, employees, shareholders, trustees, attorneys, insurers, and their respective spouses, successors, heirs, executors, estates, administrators, representatives, attorneys and agents, from and against all claims, causes of action, demands, or suits of any kind, known or unknown, arising out of or related in any way to the Asset Sale, the 1997 Sale Agreement, the Asset Purchase Agreement, the Plan, the disclosure statement relating to the Plan, the MCC Shares and MCC Warrants, the VDC Shares or the Escrowed Funds that were or could have been asserted by PortaCom from the beginning of time through the date of execution of this Agreement. Nothing contained in the foregoing release shall operate to discharge any party of its obligations under this Agreement, the Plan, the Asset Purchase Agreement, the MOU, the Escrow Agreement or the October 20 Stipulation. 6. Scope of the Releases. The foregoing releases are made based upon the Settling Parties' full and complete investigation of their respective rights and potential claims against the other party to this Agreement. The Settling Parties assume responsibility for any injury, damages 10 or loss which may hereafter arise with respect to the matters covered by such releases, except as specifically set forth above, although unknown or unanticipated at the time of the execution of this Agreement. The foregoing releases shall not impair or affect the Settling Parties' respective, prospective rights and/or performance obligations under the Plan, Asset Purchase Agreement, the MOU, the Escrow Agreement, the October 20 Stipulation or this Agreement. 7. Escrowed Funds. VDC shall not seek to compel PortaCom to disgorge or otherwise seek to recover from PortaCom, the Escrow Agent, the Disbursing Agent or Allowed Claimants any portion of the Escrowed Funds that have been paid or are payable to Allowed Claimants. 8. Parties to Bear Own Expenses. The Settling Parties agree to bear their own expenses, including attorney fees, in connection with the negotiation and settlement of the disputes between them, including the execution of this Agreement and all related matters, except as otherwise agreed in writing. 9. Future Challenge to this Agreement.If either VDC or PortaCom (the "Filing Party") commences a legal action, proceeding, adversary proceeding against the other party hereto (the "Responding Party"), either challenging the enforceability of this Agreement or claiming a breach of the terms of this Agreement, the party which prevails in such a legal action, proceeding or adversary proceeding shall be entitled to be reimbursed by the other party hereto for all of its expenses and costs incurred in connection with such legal action, proceeding or adversary proceeding, including, but not limited to, attorneys' fees, accounting fees, investment banker fees, other professional fees, disbursements, costs, and/or costs of suit. The Settling Parties covenant and agree not to challenge the enforceability of this Agreement or claim a breach hereof unless there exists a reasonable basis in law and fact to do so. In the event that the claims raised by the Filing 11 Party are determined by a court of competent jurisdiction to be without reasonable basis in law or fact, the covenant in the preceding sentence shall be breached and the Filing Party shall pay to the Responding Party liquidated damages in an amount determined by the following formula: the value of the shares of VDC common stock (including treasury stock) held by the Responding Party on the date that the Filing Party commences a legal action against the Responding Party subtracted by the value of the shares of VDC common stock held by the Responding Party on the date that the court determines that the legal action has no reasonable basis in law or fact. The Settling Parties acknowledge that calculating the damages caused by a breach of the covenants in this Section would be difficult to estimate accurately and that the foregoing formula is a reasonable approximation thereof and is intended as a fair allocation and liquidation of damages and not as a penalty against the Filing Party. The liquidated damages provided for in this Section shall be the exclusive remedy available to the Responding Party to compensate it for the harm caused by the Filing Party for breaching the covenants contained in this Section. 10. Covenants of VDC. VDC hereby covenants and agrees that it shall: (a) In order to permit PortaCom to fund administration expenses payable to Class 1 Allowed Claimants under the Plan: (x) cause its counsel to deliver legal opinions acceptable to such counsel as may be reasonably requested by PortaCom in connection with the resale of shares of VDC common stock by PortaCom and (y) to the extent permitted under applicable federal and state securities laws, provide to PortaCom upon reasonable request copies of reports filed by VDC with the Securities and Exchange Commission and other publicly available information concerning VDC. It is expressly understood by the parties hereto that this paragraph shall not impose any obligation on VDC to act as a purchaser or broker in relation to the resale of the shares of VDC common stock. 12 (b) Use reasonable efforts (exclusive of initiating litigation) to assist PortaCom in obtaining the return of the Third Series shares pledged to MCC under the Pledge Agreement to secure PortaCom's contingent contractual indemnification obligations under the Termination Agreement dated September 11, 1996 by and among PortaCom, MCC, and Max E. Bobbit (the "Termination Agreement") upon the earliest occurrence of several Release Conditions (as defined in the Pledge Agreement). (c) On or shortly after March 17, 1999, issue to the transfer agent for VDC's common stock instructions to remove from certificates evidencing shares of the "Second Series" all restrictive legends. 11. General Representations and Warranties. Each party represents and warrants to the others as follows: (a) Power and Authorization. It has all requisite power and authority (corporate and otherwise) to enter into this Agreement, and has duly authorized by all necessary action (including without limitation by its board of directors) the execution and delivery hereof by the officer or individual whose name is signed on its behalf below. (b) No Conflict. Its execution and delivery of this Agreement and the performance of its obligations hereunder, do not and will not conflict with or result in a breach of or a default under its organizational instruments or any other agreement, instrument, order, law or regulation applicable to it or by which it may be bound. (c) Enforceability. This Agreement has been duly and validly executed and delivered by it and constitutes its valid and legally binding obligation, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency or other laws of 13 general application relating to or affecting the enforcement of creditors' rights and except as enforcement is subject to general equitable principles. 12. Further Actions. The parties agree to execute such additional documents and to perform all such other and further acts as may be reasonably necessary or desirable to carry out the purposes and intents of this Agreement, at the cost of the requesting party. 13. Notices. All notices, requests, instructions, consents and other communications to be given pursuant to this Agreement shall be in writing and shall be deemed received (i) on the same day if delivered in person, by same-day courier or by telegraph, telex or facsimile transmission (provided that telegraph, telex or facsimile notice shall be deemed received on the next business day if received after 5:00 p.m. local time), (ii) on the next day if delivered by overnight mail or courier, or (iii) on the date indicated on the return receipt, or if there is no such receipt, on the third calendar day (excluding Sundays) if delivered by certified or registered mail, postage prepaid, to the party for whom intended to the following addresses: If to PortaCom: Michael Richard PortaCom Wireless, Inc. 10061 Talbert Avenue, Suite 200 Fountain Valley, CA 92708 Fax: 714-593-3264 and Mr. Steven Rosner c/o SLD Capital Corporation One Belmont Avenue, Ste. 417 Bala Cynwyd, PA 19004 Fax: 610-660-5905 With a copy to: 14 Michael C. Forman, Esquire Klehr, Harrison, Harvey, Branzburg & Ellers LLP 1401 Walnut Street Philadelphia, PA 19102 Fax: 215-568-6603 If to VDC: Frederick A. Moran, CEO VDC Communications, Inc. 75 Holly Hill Lane Greenwich, CT 06830 Fax: 203-552-0908 With copies to: Stuart Brown, Esquire Buchanan, Ingersoll, P.C. Eleven Penn Center 1835 Market Street, 14th Floor Philadelphia, PA 19103 Fax: 215-665-8760 Louis Frost, Esquire VDC Communications, Inc. 75 Holly Hill Road Greenwich, CT 06830 Fax: 203-552-0908 Each party may by written notice given to the other in accordance with this Agreement change the address to which notices to such party are to be delivered. 14. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, between them with respect to the subject matter hereof. Each party has executed this Agreement without reliance upon any promise, representation or warranty other than those expressly set forth herein and neither party shall be bound by or liable for any alleged 15 representation, promise, inducement or statement of intention not so set forth. Each party acknowledges that (i) it has carefully read this Agreement, (ii) it has had the assistance of legal counsel of its choosing (and such other professionals and advisors as it has deemed necessary) in the review and execution hereof, (iii) the meaning and effect of the various terms and provision hereof have been fully explained to it by such counsel, (iv) it has conducted such investigation, review and analysis as it has deemed necessary to understand the provisions of this Agreement and the transactions contemplated hereby, and (v) it has executed this Agreement of its own free will. 15. Amendment. No amendment of this Agreement shall be effective unless embodied in a written instrument executed by all of the parties. 16. Waiver of Breach. The failure of any party hereto at any time to enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any provisions hereof or the right of any party hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party against whom or which enforcement of such waiver is sought; and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach. 17. Assignability. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns; provided, however, except as otherwise expressly permitted hereunder, no party hereto may assign this Agreement or any rights hereunder to any person or entity without the prior written consent of the other parties, and any attempted assignment without such consent shall be void. 16 18. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal substantive and procedural laws of the Commonwealth of Pennsylvania without regard to conflict of laws principles. The parties consent to the personal jurisdiction and venue of the Court of Common Pleas of Philadelphia County (Pennsylvania) and the United States District Court for the Eastern District of Pennsylvania and further consent that any process, notice of motion or other application to either such court or a judge thereof may be served outside the Commonwealth of Pennsylvania by registered or certified mail or by personal service in compliance with Section 13 hereof, provided that a reasonable time for appearance and in any event not less than 72 hours after receipt of service, is allowed. 19. Duties Ministerial. The duties of the Disbursing Agent are entirely ministerial and not discretionary. The Disbursing Agent may rely upon any order of court, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which the Disbursing Agent shall in good faith believe to be genuine, to have been entered of record. 20. Release of, and Covenant not to Sue, Disbursing Agent. In consideration for the Disbursing Agent's agreement to perform its duties under this Agreement, the Settling Parties, and their respective shareholders, partners, officers, employees, agents, successors and assigns, jointly and severally, hereby waive any suit, claim, demand or cause of action of any kind which any of them may have or may assert against the Disbursing Agent arising out of or relating to the execution or performance by the Disbursing Agent of its duties under this Agreement, unless such suit, claim or demand or cause of action arises from the gross negligence or willfulness of the Disbursing Agent. The Settling Parties, jointly and severally, hereby irrevocably covenant not to sue or commence or join in any proceedings, whether legal, equitable or otherwise against the Disbursing Agent on 17 account of any act or omission to act on the part of the Disbursing Agent, unless such action or omission was willful or grossly negligent. Further, to induce the Disbursing Agent to act hereunder, the parties hereto agree to indemnify, defend and hold the Disbursing Agent harmless from any liability incurred by any action taken or omission by the Disbursing Agent, except for gross negligence or willful acts, including, but not limited to its reasonable attorneys' fees and costs in connection therewith. 21. Headings. The headings of sections and subsections have been included for convenience only and shall not be considered in interpreting this Agreement. 22. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same Agreement. This Agreement may be executed and delivered via electronic facsimile transmission with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another. 23. Interpretation and Construction. This Agreement has been fully and freely negotiated by the parties hereto, shall be considered as having been drafted jointly by the parties hereto, and shall be interpreted and construed as if so drafted, without construction in favor of or against any party on account of its participation in the drafting hereof. 18 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the date first written above. PORTACOM WIRELESS, INC. Attest:/s/ Tom Madden By:/s/ Michael Richard -------------- ---------------------------- Its: Chief Executive Officer VDC COMMUNICATIONS, INC. Attest:/s/ Clayton F. Moran By:/s/ Frederick A. Moran -------------------- ---------------------- Its: Chairman and CEO Witness: /s/ Tom Madden /s/ Michael Richard - --------------------------- ----------------------------- Michael Richards 19 -----END PRIVACY-ENHANCED MESSAGE-----