UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 14, 2000
VDC COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-14281 061524454
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
75 Holly Hill Lane
Greenwich, Connecticut 06830
(Address of principal executive office)
(203) 869-5100
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
(a) On June 14, 2000 (the "Effective Date"), Rare Telephony, Inc.,
a Nevada corporation ("Rare Telephony"), merged (the "Merger") with and into
Voice & Data Communications (Latin America), Inc., a Delaware corporation (the
"Sub") and wholly-owned subsidiary of VDC Communications, Inc. (the "Company").
The Merger was effected pursuant to the terms of an Agreement and Plan of Merger
originally dated May 25, 2000 and amended on June 14, 2000 (the "Merger
Agreement"). In connection with the Merger, the Sub changed its name to "Rare
Telephony, Inc." The consideration paid to the former shareholders of Rare
Telephony (the "Rare Telephony Shareholders") in the Merger consisted of
1,551,020 newly-issued shares of Company common stock (the "Merger
Consideration"). Of the consideration paid to the Rare Telephony Shareholders,
155,102 shares of Company common stock were placed in escrow pending receipt of
all state and federal regulatory approvals required in connection with the
Merger and 775,508 shares of Company common stock were placed in a separate
escrow and are subject to various forfeiture provisions: a portion is subject to
forfeiture, upon terms set forth in an escrow agreement, within one year of the
Effective Date in connection with indemnification claims made by the Company or
Sub pursuant to the Merger Agreement; and a portion is subject to forfeiture
within three years of the Effective Date upon terms and conditions set forth in
an escrow agreement, certain employment agreements, an independent contractor
agreement, and another agreement executed by certain Rare Telephony
Shareholders.
The principle followed in determining the amount of the Merger
Consideration was one based upon negotiation between unaffiliated parties and a
valuation of Rare Telephony undertaken by certain members of the Company's
management prior to the Merger. Prior to the Merger, there were no material
relationships between the Rare Telephony Shareholders and the Company or any of
its affiliates, any director or officer of the Company, or any associate of any
such director or officer other than as follows: (1) in anticipation of the
Merger, the Company provided Rare Telephony and one of its subsidiaries with an
aggregate of $600,000 in financing, evidenced by promissory notes, and obtained
in connection therewith guaranty agreements from two Rare Telephony Shareholders
and a security interest in certain property and securities of said Rare
Telephony Shareholders; (2) in anticipation of the Merger, the Sub entered into
employment agreements and an independent contractor agreement to take effect on
the Effective Date, with certain of the Rare Telephony Shareholders; (3) in
anticipation of the Merger, the Company entered into an agreement, to take
effect on the Effective Date, with a Rare Telephony Shareholder which provides
for said Rare Telephony Shareholder to make payments on certain capital leases
for equipment used by Rare Telephony, now Sub, and its subsidiaries, in their
business; (4) in anticipation of the Merger, the Company executed two guaranty
agreements to guarantee performance by a subsidiary of Rare Telephony, now Sub,
under two contracts; and (5) in anticipation of the Merger, and for ease of
clerical administration, an officer of the Company was appointed as Treasurer of
Rare Telephony and one of its subsidiaries. The source of the Merger
Consideration was authorized but unissued shares of Company common stock.
(b) The assets acquired by virtue of the Merger were used in
a telecommunications business prior to the Merger and will continued to be so
used.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of business acquired.
It is impracticable at the time of the filing of this Current
Report to provide the historical financial information for Rare Telephony
required by Regulation S-X. Accordingly, the Company will file the required
historical financial statements under cover of an Amendment to this Current
Report on Form 8-K as soon as practicable, but in any event, not later than 60
days after the date on which this Current Report must be filed with the
Commission.
(b) Pro forma financial information.
It is impracticable at the time of the filing of this Current Report
to provide the pro forma financial information for Rare Telephony required by
Regulation S-X. Accordingly, the Company will file the required pro forma
financial statements under cover of an Amendment to this Current Report on Form
8-K as soon as practicable, but in any event, not later than 60 days after the
date on which this Current Report must be filed with the Commission.
(c) Exhibits (referenced to Item 601 of Regulation S-K).
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Exhibit
Number Title
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<S> <C>
2.1 Agreement and Plan of Merger dated May 25, 2000 by and among VDC Communications, Inc., Voice
& Data Communications (Latin America), Inc., Rare Telephony, Inc., and the holders of all of
the outstanding common stock of Rare Telephony, Inc.
2.2 Amendment to Agreement and Plan of Merger dated June 14, 2000
2.3 Certificate of Merger of Rare Telephony, Inc. into Voice & Data Communications (Latin
America), Inc.
2.4 Articles of Merger of Rare Telephony, Inc. into Voice & Data Communications (Latin America),
Inc.
10.37 Escrow Agreement, dated May 25, 2000, by and among VDC Communications, Inc., Voice & Data
Communications (Latin America), Inc., the shareholders of Rare Telephony, Inc., and Buchanan
Ingersoll Professional Corporation
10.38 Form of Registration Rights Agreement
10.39 Form of Executive Employment Agreement
10.40 Form of Employment Agreement
10.41 Independent Contractor Agreement, dated May 25, 2000, by and among Peter J. Salzano and Voice
& Data Communications (Latin America), Inc.
2
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10.42 License Agreement, dated June 14, 2000, by and between Peter J. Salzano and Free dot
Calling.com, Inc.
10.43 Network Agreement, dated May 25, 2000, by and among Network Consulting Group, Inc. and VDC
Communications, Inc.
10.44 Funding Agreement, dated June 14, 2000, by and between Voice & Data Communications (Latin
America), Inc. and VDC Communications, Inc.
10.45 Promissory Note, dated June 23, 2000, made by Rare Telephony, Inc. in favor of Peter J.
Salzano
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3
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 23, 2000 VDC COMMUNICATIONS, INC.
By: /s/ Frederick A. Moran
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Frederick A. Moran
Chairman and Chief Executive Officer
4
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EXHIBIT INDEX
Exhibit Page Number in Rule
Number 0-3(b) Sequential
(Referenced to Item Numbering System Where
601 of Reg. S-K) Exhibit Can Be Found
<S> <C>
2.1 Agreement and Plan of Merger dated May 25, 2000 by and among VDC
Communications, Inc., Voice & Data Communications (Latin America),
Inc., Rare Telephony, Inc., and the holders of all of the
outstanding common stock of Rare Telephony, Inc.
2.2 Amendment to Agreement and Plan of Merger dated June 14, 2000
2.3 Certificate of Merger of Rare Telephony, Inc. into Voice & Data
Communications (Latin America), Inc.
2.4 Articles of Merger of Rare Telephony, Inc. into Voice & Data
Communications (Latin America), Inc.
10.37 Escrow Agreement, dated May 25, 2000, by and among VDC
Communications, Inc., Voice & Data Communications (Latin
America), Inc., the shareholders of Rare Telephony, Inc.,
and Buchanan Ingersoll Professional Corporation
10.38 Form of Registration Rights Agreement
10.39 Form of Executive Employment Agreement
10.40 Form of Employment Agreement
10.41 Independent Contractor Agreement, dated May 25, 2000, by and among
Peter J. Salzano and Voice & Data Communications (Latin America),
Inc.
10.42 License Agreement, dated June 14, 2000, by and between Peter J.
Salzano and Free dot Calling.com, Inc.
10.43 Network Agreement, dated May 25, 2000, by and among
Network Consulting Group, Inc. and VDC Communications,
Inc.
<PAGE>
10.44 Funding Agreement, dated June 14, 2000, by and between Voice &
Data Communications (Latin America), Inc. and VDC Communications,
Inc.
10.45 Promissory Note, dated June 23, 2000, made by Rare Telephony, Inc.
in favor of Peter J. Salzano
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