-----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, MeliNXOTs8qrSmTk4V3AecQfseQr3jX99g5fRU4yITEm1K7GjBtFAINTSP6nhwPe SWixHioHeZ8wxElX9lLmmA== 0001017062-98-001550.txt : 19980716 0001017062-98-001550.hdr.sgml : 19980716 ACCESSION NUMBER: 0001017062-98-001550 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980715 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VDC CORP LTD CENTRAL INDEX KEY: 0000784961 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 061510832 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-54351 FILM NUMBER: 98666709 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 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PORTACOM WIRELESS INC/ CENTRAL INDEX KEY: 0000907166 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 330650673 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10061 TALBERT AVENUE SUITE 200 STREET 2: SUITE 730 CITY: FOUNTAIN VALLEY STATE: CA ZIP: 92708 BUSINESS PHONE: 7145933234 MAIL ADDRESS: STREET 1: 8055 W MANCHESTER AVE STREET 2: SUITE 730 CITY: PLAYA DEL REY STATE: CA ZIP: 90293 FORMER COMPANY: FORMER CONFORMED NAME: EXTREME TECHNOLOGIES INC DATE OF NAME CHANGE: 19950127 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL PCBX SYSTEMS INC DATE OF NAME CHANGE: 19940119 SC 13D/A 1 DATE OF EVENT: JUNE 8, 1998 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D/A Amendment No. 1 Under the Securities Exchange Act of 1934 VDC Corporation, Ltd. (Name of Issuer) Common Stock (Title of Class of Securities) G93263104 (CUSIP Number) Klehr, Harrison, Harvey, Branzburg & Ellers LLP Attn: Michael C. Forman, Esq. 1401 Walnut Street Philadelphia, PA 19102 (215) 569-4284 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 8, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_] Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). The Registrant has filed this Schedule 13D/A in order to include the conformed signature of the Registrant's Chief Executive Officer which was unintentionally omitted from page 7 of the original filing. (Continued on following page(s)) Page 1 of 7 -- =============================================================================== CUSIP No. G93263104 Page 2 of 7 Pages =============================================================================== _______________________________________________________________________________ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON PortaCom Wireless, Inc. 33-0650673 _______________________________________________________________________________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] _______________________________________________________________________________ 3 SEC USE ONLY _______________________________________________________________________________ 4 SOURCE OF FUNDS* OO (see Item 3) _______________________________________________________________________________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] _______________________________________________________________________________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware _______________________________________________________________________________ 7 SOLE VOTING POWER 5,300,000 NUMBER OF ____________________________________________________________ SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY ____________________________________________________________ EACH REPORTING 9 SOLE DISPOSITIVE POWER 5,300,000 PERSON ____________________________________________________________ WITH 10 SHARED DISPOSITIVE POWER 0 _______________________________________________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,300,000 _______________________________________________________________________________ =============================================================================== CUSIP No. G93263104 Page 3 of 7 Pages =============================================================================== 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.2% _______________________________________________________________________________ 14 TYPE OF REPORTING PERSON* CO _______________________________________________________________________________ *SEE INSTRUCTIONS BEFORE FILLING OUT (1) The percent of class represented by the amount in row 11 reflects the Reporting Person's beneficial ownership of the Issuer's class of Common Stock. =============================================================================== CUSIP No. G93263104 Page 4 of 7 Pages =============================================================================== SCHEDULE 13D/A -------------- This statement (the "Statement") relates to the common stock, par value $2.00 per share (the "Common Stock") of VDC Corporation, Ltd., a Bermuda corporation (the "Issuer"). This Statement constitutes an initial filing of Schedule 13D for PortaCom Wireless, Inc. (the "Company"). Item 1 Security and Issuer - ------ ------------------- This Statement relates to the Issuer's Common Stock. The address of the Issuer's principal executive office is 75 Holly Hill Lane, 3rd Floor, Greenwich, CT 06830. Item 2 Identity and Background - ------ ----------------------- (a) The corporation filing this Statement is the Company, as defined above. (b-c) The address of the Company's principal executive office is 10061 Talbert Avenue, Suite 200, Fountain Valley, CA 92708. The Company has ceased its principal business operations, and the Company has filed for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). (d) During the last five years, the Company has not been convicted in any criminal proceeding. (e) During the last five years, the Company has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. Item 3 Source and Amount of Funds or Other Consideration - ------ ------------------------------------------------- On June 8, 1998, the Company consummated the sale to the Issuer of 2,000,000 shares of common stock and warrants to acquire, at an exercise price of $4.00 per share, an additional 4,000,000 shares of common stock of Metromedia China Corporation ("MCC") (formerly Metromedia Asia Corporation "MAC"). In consideration for the sale of such assets and subject to certain adjustment features, the Company received 5,300,000 newly issued shares of Common Stock and the right to utilize a maximum of $3,000,000 in cash (the "Cash") to satisfy claims (the "Claims") made against the Company in its bankruptcy proceedings, as described in Item 4. Item 4 Purpose of the Transaction - ------ -------------------------- The Company obtained the Common Stock reported herein in connection with the Company's Plan of Reorganization (the "Plan") filed in its Chapter 11 Bankruptcy case in the United States Bankruptcy Court (the "Bankruptcy Court") for the District of Delaware, Case No. 98-661 (PJW). The Plan remains subject to, among other things, the approval of impaired creditors and stockholders and confirmation by the Bankruptcy Court. To the extent that more than $384,725 of the Cash is used by the Company to satisfy the Claims, the excess thereof will result in the Company returning to the Issuer a certain number of shares of the Common Stock according to a predetermined formula. Additionally, the Company may receive additional shares of Common Stock according to a predetermined formula based upon the market price of the Common Stock and MAC common stock. The final =============================================================================== CUSIP No. G93263104 Page 5 of 7 Pages =============================================================================== amount of the Common Stock received by the Company will be determined by the Company, its creditors, and the Bankruptcy Court. The Company shall then retain the Common Stock until such time as a transfer or other disposition of the Common Stock to the Company's creditors and stockholders takes place pursuant to a confirmed plan of reorganization providing for the transfer of the Common Stock pursuant to the exemption set forth in (S)1145 of the Bankruptcy Code, or an effective registration statement, pursuant to the Securities Act of 1933, as amended. Except as otherwise described above, the Company does not have any present plans or proposals which relate to, or would result in: (a) an acquisition by any person of additional securities of the Issuer, or the disposition of securities of the issuer; (b) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries; (d) any change in the present Board of Directors (the "Board") or management of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) any changes in the Issuer's charter, by-laws, or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) a class of securities of the Issuer to cease to be authorized to be quoted in an inter- dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to the Act; or (j) any action similar to those enumerated above. Item 5 Interest in Securities of the Issuer - ------ ------------------------------------ (a-b) As of June 8, 1998, the Company is the beneficial owner of, and has sole dispositive and voting power with respect to, 5,300,000 shares of Common Stock, which shares constitute 58.2 % of the issued and outstanding shares of Common Stock (based on 9,099,838 shares of Common Stock issued and outstanding as of the date hereof, which consists of 3,799,838 shares of Common Stock issued and outstanding as reported in the Issuer's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 and the 5,300,000 newly issued shares of Common Stock reported herein). (c) Except for the transactions described in Item 3 above, the Company has not effected any transactions in the securities of the Issuer during the past sixty (60) days. (d) No persons, other than the Company, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares acquired by the Company. (e) Not applicable. Item 6 Contracts, Arrangements, Understandings, or Relationships with Respect - ------ ---------------------------------------------------------------------- to Securities of the Issuer - --------------------------- On June 8, 1998, the Issuer, the Company and Klehr, Harrison, Harvey, Branzburg and Ellers, LLP (the "Escrow Agent") entered in to an agreement (the "Escrow Agreement") whereby the Issuer delivered to the Escrow Agent the shares of Common Stock which are to be held by the Escrow Agent until distribution of the Common Stock is made to the Company's creditors and stockholders in satisfaction of the Claims. See Item 7 and the Escrow Agreement filed as Exhibit I to this Statement. On June 8, 1998, the Company and MCC entered into an agreement whereby the Company acknowledged and agreed that MCC holds a valid, perfected, first- priority replacement lien on 50% of the Common Stock (the "Pledge Agreement"). See Item 7 and the Pledge Agreement filed as Exhibit II to this Statement. On June 8, 1998, the Company and the Issuer entered into an agreement whereby the Issuer agreed to pay the =============================================================================== CUSIP No. G93263104 Page 6 of 7 Pages =============================================================================== Company an amount, either in cash or in additional Common Stock, according to a predetermined formula based upon the market price of the Common Stock and MAC common stock (the "Deferred Purchase Price Note"). See Item 7 and the Deferred Purchase Price Note filed as Exhibit III to this Statement. Item 7 Material to be Filed as Exhibits - ------ -------------------------------- Escrow Agreement Exhibit I Pledge Agreement Exhibit II Deferred Purchase Price Note Exhibit III =============================================================================== CUSIP No. G93263104 Page 7 of 7 Pages =============================================================================== SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. July 15, 1998 Date /s/ Michael A. Richard ------------------------------------------- Signature Michael A. Richard, Chief Executive Officer ------------------------------------------- Name / Title EX-99.I 2 ESCROW AGREEMENT EXHIBIT I ESCROW AGREEMENT ---------------- This ESCROW AGREEMENT ("Agreement") is made as of the 16 day of April, 1998, by and among VDC Corporation Ltd. ("Buyer"), PortaCom Wireless, Inc. ("Debtor"), the Official Committee of Unsecured Creditors of PortaCom Wireless, Inc. ("Committee"), and Klehr, Harrison, Harvey, Branzburg & Ellers LLP ("Escrow Agent"). BACKGROUND ---------- A. On March 23, 1998, Debtor filed a Voluntary Petition for relief under Chapter 11 of Title 11 of the United States Code ("Code"), commencing a case in the United States Bankruptcy Court for the District of Delaware (the "Court"), which is pending at number 98-661 (the "Case"). B. The Office of the United States Trustee thereafter appointed the Committee. C. Prior to the commencement of the Case, Debtor and Buyer were parties to an asset purchase agreement and amendments thereto, pertaining to Debtor's agreement to sell to Buyer its interest in and to 2,000,000 shares of common stock ("MAC Shares") of Metromedia Asia Corporation ("MAC") and warrants to purchase an additional 4,000,000 shares of MAC common stock with a strike price of $4.00 per share ("MAC Warrants"). D. Debtor and Buyer negotiated the terms of an asset purchase agreement to be entered into in the Case and approved by the Court ("Purchase Agreement") and agreed upon the procedures pursuant to which the Purchase Agreement would be submitted to the Court for approval. E. Together with the petition commencing the Case, the Debtor filed the Motion Of Debtor (A) To Establish Bidding Procedures And To Approve A Break-Up Fee In Connection With The Sale Of The Debtor's Interest In Certain Property Of The Estate And (B) To Approve The Form And Manner Of Notice ("Procedures Motion") with respect to the Purchase Agreement, and the Debtor's Motion for Approval of the Sale of the Debtor's Interest in Property of the Estate Free and Clear of Liens, Claims and Encumbrances Pursuant to 11 U.S.C. (S) 363(b) and (f) and Federal Rule of Bankruptcy Procedure 6004 ("Sale Motion") F. The Committee expressed its intention to object to various provisions of the Procedures Motion and Notice and the Sale Motion, which objections were resolved through the modification of the terms of the Purchase Agreement as set forth in the Stipulation and Order in Lieu of Objection, entered by the Court on or about April 6, 1998 ("Stipulation"). G. The Stipulation provides for the creation and funding of an escrow account in connection with the Purchase Agreement. This Agreement is delivered in furtherance of the Stipulation. NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto do hereby agree as follows: 1. The foregoing recitals are hereby incorporated in this Agreement as though set forth at length herein. 2. Appointment of Escrow Agent. Debtor, Buyer and the Committee hereby --------------------------- appoint Escrow Agent, and Escrow Agent hereby accepts such appointment, as the escrow agent hereunder. Escrow Agent agrees to comply with the terms and conditions hereof. The Escrow Agent's appointment hereunder shall terminate as provided in paragraph 3. 3. Term of Agreement; Termination and Appointment of Successor Agent. ----------------------------------------------------------------- This Agreement shall automatically terminate upon the latest to occur of: a. The latest to occur of any of the following conditions ("Failure Conditions"): (i) Buyer is not the Successful Bidder (as defined in the Procedures Motion and the Sale Motion) at the auction to be held on or about April 23, 1998, or any time thereafter as the Court may direct; (ii) the sale of the MAC Shares and MAC Warrants to Buyer is not confirmed by the Court after the auction takes place; (iii) the sale of the MAC Shares and MAC Warrants to Buyer does not close within the time contemplated and required by the Purchase Agreement; or (iv) after approval of the Purchase Agreement by a final, non-appealable Order of the Court, the occurrence of any terminating event specified in Article 11 of the Purchase Agreement. Upon termination of this Agreement as a result of the occurrence of one of the Failure Conditions, the Escrow Agent shall immediately (x) distribute all of the Escrowed Funds and any and all accrued interest and earnings thereon to Buyer and (y) surrender the Letter of Credit (as defined below) to Buyer and neither Buyer nor the issuer of the Letter of Credit shall have any further liability under the Letter of Credit, at which time the Escrow Agent's appointment shall automatically terminate. b. In the event none of the Failure Conditions shall occur, the Escrow Agent's appointment shall automatically terminate upon the distribution of all of the Escrowed Funds and VDC Shares in accordance herewith. Prior to the automatic termination as provided for in this paragraph 3(b), the appointment of the Escrow Agent may be terminated upon the written consent of (i) Buyer and (ii) either (x) Debtor or (y) the Committee, and a successor escrow agent shall be appointed satisfactory to Buyer, Debtor and the Committee. 4. Escrowed Funds. The "Escrowed Funds" shall comprise a fund to be -------------- created by Buyer equal to $2.6 million. The Escrowed Funds shall be established with a minimum amount of cash in the amount of $1.25 million ("Cash Portion"), and the balance may be funded in cash or through an unconditional and irrevocable standby letter of credit for the benefit of Debtor ("Letter of Credit"), or such other structure reasonably acceptable to the Committee. The Escrow Agent 2 shall hold the Escrowed Funds for the payment of Closing Date Claims, Bar Date Claims, Pre-Petition Settlements and Other Allowed Claims (each as defined below). 5. Delivery of Escrowed Funds and VDC Shares to Escrow Agent. The --------------------------------------------------------- Escrowed Funds shall be delivered to the Escrow Agent within two (2) business days after the date upon which this Agreement is fully executed. At Closing (as defined in the Purchase Agreement), the Buyer shall deliver to the Escrow Agent in furtherance of Section 4(b) of the Stipulation and subject to adjustment provided for in paragraph 8 below, 5.3 million newly issued shares of common stock, par value $2.00 per share, of Buyer (the "VDC Shares"). 6. Investment of Escrowed Funds. Escrow Agent shall deposit the Cash ---------------------------- Portion in a money market account(s) in Escrow Agent's name for the benefit of Seller and Buyer (such account(s) shall be referred to hereinafter as "Escrow Account"). Escrow Agent shall invest the Cash Portion in a money market or federally-backed investment in Buyer's discretion. Escrow Agent agrees at all times to maintain and keep the Cash Portion and any and all interest and earnings thereon in the Escrow Account and to otherwise invest and disburse the Escrowed Funds and any and all interest and earnings thereon in accordance herewith. Escrow Agent shall keep the Escrowed Funds received by it hereunder and any and all interest and earnings thereon separate and distinct from funds owned by itself or others. Interest and all other earnings on the Cash Portion shall accrue and inure solely for the benefit of Buyer and shall not be added to or become part of the Escrowed Funds. 7. Order of Escrowed Funds Distributed. The Escrow Agent shall first ----------------------------------- utilize the entire Cash Portion of the Escrowed Funds to make distributions as set forth herein prior to drawing upon the Letter of Credit to make such distributions. The Escrow Agent shall not be responsible for the validity of the Letter of Credit or the failure of the issuer to honor a draw request. 8. Distribution of the Escrowed Funds and VDC Shares. ------------------------------------------------- a. At or before Closing, the Debtor shall deliver to the Escrow Agent a schedule containing the amounts and names of the holders of all priority unsecured and general unsecured claims which, as of the Closing Date (as defined in the Purchase Agreement), are scheduled by the Debtor as fixed and liquidated, unsecured claims against the Debtor's estate and for which no proof(s) of claim has been filed or for which proof(s) of claim have been filed in the scheduled or a lesser amount ("Closing Date Claims"). At Closing, the Escrow Agent shall deliver to Debtor from the Escrowed Funds cash in an amount equal to the Closing Date Claims for distribution to the holders of Closing Date Claims. b. Upon the later of (i) Closing or (ii) the entry of a final, non-appealable Order by the Court approving or ratifying the settlement agreements entered into by the Debtor prior to the commencement of the Case ("Pre-Petition Settlements"), or otherwise authorizing a settlement and compromise upon the terms of, the Pre-Petition Settlements, including an Order confirming a plan of reorganization providing for such approval, ratification, or authorization, the Escrow Agent shall deliver to Debtor or the disbursing 3 agent under such plan, as the case may be, cash and a portion of the VDC Shares in an amount equal to that to be distributed pursuant to the Pre- Petition Settlements. In the event Debtor fails to obtain a final, non- appealable Order approving or ratifying any of the Pre-Petition Settlements, or otherwise authorizing a settlement and compromise upon the terms of such Pre-Petition Settlement, then any resulting claim asserted against the Debtor's estate shall constitute a Disputed Claim and treated in accordance with paragraph 8(d) below. c. Within seven (7) days after May 15, 1998 (the "Bar Date"), Debtor shall deliver to the Escrow Agent, Buyer and the Committee a schedule containing the amounts and names of holders of all claims, other than the Closing Date Claims, as to which, as of the Bar Date, proof(s) of claim have been filed in the scheduled or a lesser amount than that which was scheduled by the Debtor (collectively, the "Bar Date Claims"). Within five (5) days after delivery by the Debtor of such schedule, the Escrow Agent shall deliver to Debtor from the Escrowed Funds cash in an amount equal to the Bar Date Claims for distribution to the holders of Bar Date Claims. d. All claims against the Debtor's estate other than the Closing Date Claims, the Pre-Petition Settlements and the Bar Date Claims constitute "Disputed Claims." From time to time, and to the extent that any Disputed Claim becomes an allowed claim pursuant to a final, non-appealable Order of the Court ("Other Allowed Claims"), the Escrow Agent shall deliver to Debtor or the disbursing agent under a plan of reorganization confirmed in the Debtor's case, as the case may be, for distribution to the holder(s) thereof, cash and/or a portion of the VDC Shares having an aggregate value equal to the aggregate amount of the Other Allowed Claim; and shall disburse to Buyer the 60% Credit (as defined below) for each Other Allowed Claim. e. After payment of all Closing Date Claims, Pre-Petition Settlements, Bar Date Claims, and Other Allowed Claims, the Escrow Agent shall make a final distribution: (a) To the Buyer: (i) of cash in an amount equal to the sum of the disallowed amount of Disputed Claims not previously disbursed as part of the 60% Credit, plus the Cash Portion funded in excess of the cash required to pay the Closing Date Claims, Bar Date Claims, cash paid under Pre-Petition Settlements, and cash paid to holders of Other Allowed Claims, plus all interest and other earnings on the Escrowed Funds, and (ii) of the "Returned Shares," defined as a portion of the VDC Shares in an amount equal to the difference between (x) the total amount of the Escrowed Funds distributed on account of the Closing Date Claims, Bar Date Claims, Pre-Petition Settlements and Other Allowed Claims and (y) the Indebtedness (as defined in the Purchase Agreement) plus the fee incurred by Buyer to obtain the Letter of Credit, divided by the value of the VDC stock valued consistently with paragraph 14 of the Motion; and (b) To the Debtor: of all of the VDC Shares remaining after distribution of the Returned Shares to Buyer (equal to 5,300,000 shares less the Returned Shares). 4 9. 60% Credit. The "60% Credit" shall constitute a reduction in Buyer's ---------- liability under the Letter of Credit and/or a payment in cash to Buyer, whichever Buyer may from time to time elect in writing, in an amount equal to 60% of the disallowed portion of any Disputed Claim. In the event Buyer has elected to receive a reduction in its liability under the Letter of Credit, the Escrow Agent shall as is necessary to implement paragraph 8(e) hereof, send written notice of the 60% Credit(s) to the financial institution issuing the Letter of Credit. 10. Consent to Distributions. Notwithstanding any other provision of ------------------------ the Agreement to the contrary, no distribution of the Escrowed Funds or VDC Shares shall be made under this Agreement or otherwise, unless the Escrow Agent has the written consent of Buyer, Debtor and the Committee to any such proposed distribution, which consent shall not be unreasonably withheld. 11. Fees of Escrow Agent. The Escrow Agent shall not be entitled to any -------------------- compensation or reimbursement of expenses on account of its services as Escrow Agent directly from the Escrowed Funds; however, the Escrow Agent shall be entitled to be compensated for its services from funds otherwise available for distribution to the holders of administrative expense claims, subject to Court approval under Code (S)(S) 330, 331, and/or 503. 12. Duties Ministerial. The duties of Escrow Agent are entirely ------------------ ministerial and not discretionary. Escrow 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 Escrow Agent shall in good faith believe to be genuine, to have been entered of record. 13. Release of, and Covenant not to Sue, Escrow Agent. In consideration ------------------------------------------------- for the Escrow Agent's agreement to perform its duties under this Agreement, Buyer, Debtor and Committee, 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 Escrow Agent arising out of or relating to the execution or performance by Escrow 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 Escrow Agent. Buyer, Debtor and Committee, jointly and severally, hereby irrevocably covenant not to sue or commence or join in any proceedings, whether legal, equitable or otherwise, against Escrow Agent on account of any act or omission to act on the part of Escrow Agent, unless such action or omission was willful or grossly negligent. Further, to induce Escrow Agent to act hereunder, the parties hereto agree to indemnify, defend and hold Escrow Agent harmless from any liability incurred by any action taken or omission by Escrow Agent, except for gross negligence or willful acts, including, but not limited to its reasonable attorneys' fees and costs in connection therewith. 14. Conflict Waiver. After consultation with their respective counsel, --------------- the parties hereto waive any actual and/or potential conflict of interest between the parties hereto and the Escrow Agent, or any future conflicts which may arise during the course of performance of this Agreement or the administration of the Case resulting from the Escrow Agent's execution and performance of this Agreement. 5 15. Disputes. In the event of any disputes regarding the Escrowed -------- Funds, including without limitation their distribution, use, or ownership, the Escrow Agent shall implead the Escrowed Funds to the Court. 16. Notices. All notices, demands, requests and other communications ------- required or permitted hereunder shall be in writing and shall be deemed to be delivered (a) when actually transmitted via facsimile, or (b) one day following deposit with a nationally recognized overnight carrier, addressed to the addressee as follows: (a) If to Buyer: Frederick A. Moran, Chief Executive Officer VDC Corporation, Ltd. 27 Doubling Road Greenwich, CT 06830 (203) 869-1430 (Fax) with copies to: Stuart M. Brown, Esquire Buchanan Ingersoll Professional Corporation 11 Penn Center, 14th Floor 1835 Market Street Philadelphia, PA 19103 (215) 665-8760 (Fax) (b) If to Debtor: Michael Richard, President PortaCom Wireless, Inc. 10061 Talbert Avenue, Suite 200 Fountain Valley, CA 92708 (714) 593-3264 (Fax) with copies to: Francis A. Monaco, Jr., Esquire Walsh and Monzack, P.A. 1201 Orange Street, Suite 400 Wilmington, DE 19899 (302) 656-2769 (Fax) and Michael C. Forman, Esquire Klehr, Harrison, Harvey, Branzburg & Ellers LLP 1401 Walnut Street Philadelphia, PA 19102 (215) 568-6603 (Fax) 6 (c) If to Committee: Francis J. Lawall, Esquire Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 (215) 981-4750 (Fax) (d) If to Escrow Agent: Jeffrey Kurtzman, Esquire Klehr, Harrison, Harvey, Branzburg & Ellers LLP 1401 Walnut Street Philadelphia, PA 19102 (215) 568-6603 (Fax) 17. Substitution of Letter of Credit. In the event Buyer initially -------------------------------- funds the entire Escrowed Funds in cash, Buyer may thereafter elect to substitute up to $1.35 million of the Escrowed Funds with an unconditional and irrevocable standby letter of credit for the benefit of Debtor, which shall be presented upon terms reasonably acceptable to Debtor and the Committee, and shall deliver such letter of credit to the Escrow Agent, who shall treat such letter of credit as if it was the Letter of Credit and had been delivered to the Escrow Agent initially under the terms of this Agreement. Upon receipt of such letter of credit, the Escrow Agent shall release to Buyer cash from the Escrowed Funds in an amount equal to the face value of such letter of credit. 18. Savings Clause. In the event that any provision of this Agreement -------------- or its application to any person or circumstance shall be finally determined by the court to be invalid or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 19. Interpretation. This Agreement shall be interpreted in accordance -------------- with the laws of the Commonwealth of Pennsylvania for contracts made and performed within the Commonwealth. 20. Binding Effect. This Agreement shall be binding upon and inure to -------------- the benefit of the parties hereto, and their respective successors and assigns, including any trustee appointed or elected pursuant to Code (S)(S) 701 and 702. The terms and conditions of this Agreement, the rights and the obligations of the parties and their respective successors and assigns shall survive any and all breaches and/or defaults under this Agreement and any such other events as may occur as herein provided. 21. Jurisdiction. The United States Bankruptcy Court for the District ------------ of Delaware, or any other court exercising jurisdiction over the Debtor's estate, shall have exclusive jurisdiction to enforce the terms and conditions of this Agreement and enter any and all appropriate injunctions, contempt orders, orders for specific performance and other relief as may be just and equitable. 7 22. Captions. The titles and captions used herein are for reference -------- only and shall not constitute a part of this Agreement or construed as having any legal effect. 23. Counterparts. This Agreement may be executed in one or more ------------ counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above-written. VDC CORPORATION, LTD. By: /s/ Frederick A. Moran ------------------------------------------- Frederick A. Moran, Chairman and Chief Executive Officer PORTACOM WIRELESS, INC. By: /s/ Michael A. Richard ------------------------------------------ Michael A. Richard, President OFFICIAL COMMITTEE OF UNSECURED CREDITORS BY: /s/ J. Michael Christiansen ------------------------------------------ J. Michael Christiansen, Chairman ESCROW AGENT - KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS LLP BY: /s/ Jeffrey Kurtzman ------------------------------------------ Jeffrey Kurtzman, A Member of the Firm 8 EX-99.II 3 PLEDGE AGREEMENT EXHIBIT II [PortaCom Wireless, Inc. Letterhead] June 8, 1998 VIA TELECOPIER (201) 531-2803 AND OVERNIGHT COURIER - ---------------------------------- Metromedia China Corporation One Meadowlands Plaza East Rutherford, New Jersey 07073 Re: PortaCom Wireless, Inc., Case No. 98-661(PJW) (Chapter 11) --------------------------------- Gentlemen: This letter agreement (the "Letter Agreement") is made this 8 day of June, 1998 between Metromedia China Corporation, formerly Metromedia Asia Corporation ("MCC") and PortaCom Wireless, Inc. (the "Debtor") and is intended to clarify and confirm the rights of MCC arising from the Order of the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") dated April 23, 1998 ("Sale Order") authorizing the sale of the MAC Shares and the Warrants (as defined in the Sale Order) to VDC Corporation, Ltd. ("VDC"), and is further intended to conform that certain Escrow Agreement dated April __, 1998, by and among VDC, Debtor, the Official Committee of Unsecured Creditors of PortaCom Wireless, Inc. ("Committee") and Klehr, Harrison, Harvey, Branzburg & Ellers LLP, as Escrow Agent ("Escrow Agreement") to the Sale Order. Pursuant to that certain Termination Agreement dated September 11, 1996 by and among the Debtor, MCC, and Max E. Bobbit (the "Termination Agreement"), MCC held the MAC Shares as collateral to secure certain claims, if any, of MCC against the Debtor, as provided therein. The parties hereto understand, acknowledge and agree that, pursuant to the Sale Order, MCC holds a valid, perfected, first-priority replacement lien only on 50% of the VDC Shares (as defined in that certain Escrow Agreement) deliverable to the Debtor in accordance with that certain Asset Purchase Agreement dated March 23, 1998 by and between the Debtor and VDC, as amended by Metromedia China Corporation June 8, 1998 Page 2 that certain Stipulation in Lieu of Objection dated April 3, 1998, approved by the Bankruptcy Court on April 8, 1998, that certain Stipulation in Lieu of Objection dated and approved by the Bankruptcy Court on April 23, 1998, the Escrow Agreement and the Sale Order (the "Pledged Shares"), to secure the satisfaction of the claim of MCC, if any, against the Debtor's bankruptcy estate arising out of the Termination Agreement. Notwithstanding anything herein to the contrary, MCC's interest in the Pledged Shares is limited to the Debtor's interest in the Pledged Shares, which interest is subject to VDC's superior reversionary rights under Section 8 of the Escrow Agreement and Section 3.4 of the Asset Purchase Agreement, as amended (the "Reversionary Rights"). While VDC's Reversionary Rights, if any, shall be satisfied first from those VDC Shares which are not being pledged to MCC hereunder as the Pledged Shares, MCC understands and acknowledges that, to the extent such non-pledged VDC Shares are insufficient to satisfy VDC's Reversionary Rights, the Pledged Shares are subject to the Reversionary Rights and such portion of the Pledged Shares necessary to satisfy the Reversionary Rights shall be immediately returned to VDC upon written notice from VDC and the Debtor certifying that such Pledged Shares are necessary to satisfy the Reversionary Rights in accordance with this letter or the entry of an appropriate order of a court of competent jurisdiction. Accordingly, VDC is an intended third party beneficiary of the letter agreement with notice and whose rights hereunder may not be impaired without VDC's prior written consent. Subject to the foregoing, the Debtor hereby agrees, and hereby authorizes the Closing Escrow Agent (as defined in that certain Closing Escrow Agreement dated June __, 1998 by and among the Debtor, VDC, Klehr, Harrison, Harvey Branzburg & Ellers LLP and MCC), to deliver to MCC, as soon as practicable following the Closing of the sale of the MAC Shares and Warrants, the Pledged Shares, thereby perfecting MCC's interest therein. MCC agrees to possess the Pledged Shares until the earliest to occur of the following ("Release Conditions"): (i) the disallowance, if any, of MCC's claim, if any, against the Debtor in its entirety, or estimation of such claim, if any, in the amount of $0.00, pursuant to a final, non-appealable order ("Disallowance Order") of the Bankruptcy Court; (ii) the allowance of MCC's claim against the Debtor's bankruptcy estate, in whole or in part, pursuant to or in accordance with a final, non-appealable order of the Bankruptcy Court and the satisfaction of the allowed portion of such claim by the Debtor pursuant to or in accordance with a final, non-appealable order of the Bankruptcy Court or confirmed plan of reorganization (whether such satisfaction occurs as a result of payment by the Debtor or as a result of repossession by MCC of the Pledged Shares in exercise of its security interest therein); or (iii) the delivery of a certificate asserting VDC's right to VDC's Reversionary Rights, as contemplated by the foregoing paragraph; or (iv) January 1, 1999; provided, however, if any asserted claim or litigation for which MCC is entitled to indemnification under the Termination Agreement has not been resolved prior to the earlier of the date of any Disallowance Order or January 1, 1999, then the Pledged Shares shall not be released from the lien in favor of MCC and shall not be delivered to Debtor (or its agent) until all such litigation has been finally resolved and all statutes of limitations relevant to any claim Metromedia China Corporation June 8, 1998 Page 3 asserted have expired. The Debtor agrees not to seek a final order adjudicating the validity or extent of MCC's claim, if any, against the Debtor which would become effective prior to January 1, 1999; MCC acknowledges and understands that the Debtor does not control the actions of any third parties with respect to MCC's claim, if any. The Debtor acknowledges and agrees that the agreement set forth in the preceding sentence will not unduly delay the administration of the Debtor's estate. Upon the happening of any of the Release Conditions, the Pledged Shares, or a portion thereof, shall be released from the lien in favor of MCC and from all restrictions provided herein and shall be delivered to the Escrow Agent (as defined herein), or VDC, as the case may be, and shall remain subject to the terms and restrictions of the Escrow Agreement. This Letter Agreement sets forth the entire agreement of the parties hereto with respect to the subject matter hereof and may be amended only in writing signed by each party hereto. Very truly yours, PORTACOM WIRELESS, INC. By: /s/ Michael A. Richard ------------------------------------------------- Michael A. Richard, CEO cc: Stephen J. Shimshak, Esquire (via telecopier 212-373-2366) Stuart Brown, Esquire (via telecopier 215-665-8760) Francis J. Lawall, Esquire (via telecopier 215-981-4750) Francis Monaco, Jr., Esquire (via telecopier 302-656-2769) Jeffrey D. Kurtzman, Esquire (via telecopier 215-568-6603) Michael Forman, Esquire (via telecopier 215-568-6603) AGREED AND ACCEPTED: METROMEDIA CHINA CORPORATION By:_________________________________ EX-99.III 4 DEFERRED PURCHASE PRICE NOTE EXHIBIT III PROMISSORY NOTE June 9, 1998 FOR VALUE RECEIVED, VDC CORPORATION LTD., a Bermuda corporation (the "Maker"), promises to pay to the order of PORTACOM WIRELESS, a Delaware corporation (the "Payee") the amount set forth below in accordance with the terms hereof. This Note is the Deferred Purchase Price Note referred to in the Asset Purchase Agreement, dated March 23, 1998, between Maker and Payee, as amended (the "Purchase Agreement") and the Memorandum of Understanding, dated as of June 9, 1998, among Maker, Payee and the Official Committee of Unsecured Creditors of PortaCom Wireless, Inc. (the "MOU"). Capitalized terms not defined herein shall have the meaning ascribed thereto in the Purchase Agreement. The original principal amount due hereunder shall be that amount calculated in accordance with the following formula (the "Formula"), as set forth in Section 3.5 of the Purchase Agreement: MAC Market Price - VDC Market Price x $5,000,000 ---------------- ---------------- MAC Base Price VDC Base Price The entire principal amount outstanding under this Note shall be payable in either lawful money of the United States or, at Maker's sole option, shares of common stock of Maker as set forth in Section 3.5(b) of the Purchase Agreement, at Payee's principal offices at 10061 Talbert Avenue, Suite 200, Fountain Valley, California 92708 or at such other place or places as Payee shall designate, on September 4, 1999, provided, however, that Maker shall not be obligated to pay any amount due hereunder and this Note shall be deemed null and void in the event that either (1) on June 8, 1999, Metromedia China Corporation is not a publicly traded company whose shares are registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or (2) the amount calculated in accordance with the Formula is a negative number. Maker is obligated to make the payments on the above specified due date in accordance with the terms of this Note and the Purchase Agreement without defalcation or setoff and without notice or demand, and the failure to receive any notice or demand from Payee shall not be a defense to, or excuse for, the failure to make such payment on the due date. Maker shall be in default hereunder upon the occurrence of any of the following events (an "Event of Default"): (i) the failure to make payment when due; or (ii) the failure of Maker to observe or perform or cause to be observed or performed any agreement, condition or obligation on Maker's part to be performed hereunder. Upon the occurrence of any Event of Default, the entire amount outstanding under this Note shall, at the option of Payee, become immediately due and payable without presentment, demand or further action of any kind, and one or more executions may forthwith issue on any judgment or judgments obtained by virtue of any provision of this Note or otherwise obtained. The rights and remedies provided herein shall be cumulative and concurrent and shall not be exclusive of any right or remedy provided by law, in equity or otherwise. Said rights and remedies may, at the sole discretion of Payee, be pursued singly, successively or together as often as occasion therefor shall arise, against Maker. No failure on the part of Payee to exercise any of such rights or remedies shall be deemed a waiver of any such rights or remedies or of any Event of Default hereunder. The granting, with or without notice, of any extension or extensions of time for payment of any sum or sums due hereunder, or for the performance of any covenant, provision, condition or agreement contained herein or therein, or the granting of any other indulgence, or the taking or releasing or subordinating of any security for the indebtedness evidenced hereby, or any other modification or amendment of this Note will in no way release or discharge the liability of Maker whether or not granted or done with the knowledge or consent of Maker. Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder, at law or in equity, unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in the writing. A waiver as to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. In the event any portion of this Note shall be declared by any court of competent jurisdiction to be invalid or unenforceable, such portion shall be deemed severable from this Note, and the remaining parts hereof shall remain in full force and effect, as fully as though such invalid or unenforceable portion was never part of this Note. The obligations of Maker hereunder shall be binding on the heirs, representatives, successors and assigns of Maker and the benefits of this Note shall inure to Payee, and its heirs, representatives, successors and assigns and to any holder of this Note. The outstanding balance due under this Note may be prepaid, in the aggregate during the term of this Note, in whole or in part, without penalty or premium. No partial prepayment shall postpone or interrupt payment of the remaining balance, which shall continue to be due and payable at the time and in the manner set forth above. All notices and other communications required or given under this Note shall be in writing and shall be sent by U.S. certified mail, return receipt requested, or by a nationally recognized overnight courier service, addressed to Payee or to Maker at their respective addresses as set forth in the Purchase Agreement. 2 This Note, and all issues arising hereunder, shall be governed by and construed according to the laws of the State of Delaware. IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Promissory Note to be duly executed as of the 9th day of June, 1998. VDC CORPORATION LTD. By: /s/ Frederick A. Moran ---------------------------- Frederick A. Moran, Chief Executive Officer 3 -----END PRIVACY-ENHANCED MESSAGE-----