<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
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).
(Continued on following page(s))
Page 1 of 7
--
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CUSIP No. G93263104 Page 2 of 7 Pages
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_______________________________________________________________________________
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
_______________________________________________________________________________
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CUSIP No. G93263104 Page 3 of 7 Pages
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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.
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CUSIP No. G93263104 Page 4 of 7 Pages
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SCHEDULE 13D
------------
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
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CUSIP No. G93263104 Page 5 of 7 Pages
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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
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CUSIP No. G93263104 Page 6 of 7 Pages
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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
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CUSIP No. G93263104 Page 7 of 7 Pages
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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 ______, 1998
Date _____________________________
Signature
_____________________________
Name / Title
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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:_________________________________
<PAGE>
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,
<PAGE>
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
<PAGE>
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
