NETWORK AGREEMENT
-----------------
THIS AGREEMENT is dated as of the 25th day of May, 2000, by and among
Network Consulting Group, Inc., ("Network") and VDC Communications, Inc.
("VDC").
WITNESSETH:
-----------
WHEREAS, pursuant to a Merger Agreement by and among VDC, Voice & Data
Communications (Latin America), Inc. (the "Sub"), Rare Telephony, Inc., a Nevada
corporation (f/k/a Washoe Technology Corporation) ("Rare Telephony"), and the
holders of all of the outstanding shares of common stock of Rare Telephony dated
May 25, 2000 (the "Merger Agreement"), Rare Telephony will be merging with and
into the Sub (the "Merger") for shares of common stock of VDC (the "Shares");
WHEREAS, in connection with the Merger, VDC, the Sub, the Rare
Telephony Shareholders, and Buchanan Ingersoll Professional Corporation entered
into an Escrow Agreement, dated May 25, 2000 (the "Escrow Agreement");
WHEREAS, the terms of the Merger Agreement provide for the execution of
this Agreement.
WHEREAS, attached hereto as Exhibit "A" and incorporated herein by
reference is a list of certain leases to which Network is a party ("Leases").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Additional Payments. VDC shall pay to Network TEN DOLLARS AND NO/100
--------------------
($10.00).
2. Performance Under Leases.
-------------------------
(a) Network shall make each and every payment (other than end of
Lease fair market value or ONE DOLLAR AND NO/100 ($1.00) payments) due from
Network under the Leases.
(b) Network shall otherwise fully perform all of its agreements,
duties, responsibilities, obligations, and covenants under each of the Leases
(other than end of Lease fair market value or ONE DOLLAR AND NO/100 ($1.00)
payments).
3. End of Lease Payments. Within thirty (30) calendar days of the end of
-----------------------
each Lease, Network shall notify VDC in writing of the fact that the Lease is
about to end. Upon the payment of the end of Lease payment (i.e. the FMV payment
or the ONE DOLLAR AND NO/100 ($1.00) payment) by VDC or one of its subsidiaries
or affiliates to either Network or the lessor under the Lease, in VDC's sole
discretion, Network shall immediately take any and all action necessary or
appropriate (including, without limitation the execution of document(s)
requested by VDC's counsel) to transfer all of Network's right, title, and
interest in and to the equipment or property that is the subject of the Lease to
VDC or one of its subsidiaries or affiliates, as directed by VDC. Additionally,
at any time thereafter, Network shall execute and deliver or cause to be
executed and delivered such further instruments of conveyance, assignment and
transfer and take such further action as VDC may request in order more
effectively to sell, assign, convey, transfer, reduce to possession and record
title to the equipment or property that is the subject of the Lease. Network
agrees to cooperate with VDC in all respects to assure the continued title to
and possession of such equipment and property in VDC or the VDC subsidiary or
affiliate of VDC's choosing.
4. Certain Remedies for VDC in the Event of Default. IF NETWORK BREACHES
-------------------------------------------------
ANY MATERIAL TERM OF THIS AGREEMENT OR OF ANY ONE OF THE LEASES (AND ANY SUCH
BREACH REMAINS UNCURED FIFTEEN (15) CALENDAR DAYS AFTER NOTICE OF SUCH BREACH IS
GIVEN BY VDC OR THE LESSOR, OR ITS AGENT, FOR ANY LEASE) (EACH SUCH BREACH AND
FAILURE TO CURE CONSTITUTING A "NETWORK DEFAULT EVENT"), NETWORK SHALL FORFEIT
SHARES ISSUED IN ITS NAME PURSUANT TO THE MERGER AND MERGER AGREEMENT (THE
"NETWORK SHARES") UPON THE TERMS AND CONDITIONS SET FORTH IN THE ESCROW
AGREEMENT. TO THE EXTENT THERE ARE NOT ENOUGH NETWORK SHARES BEING HELD IN
ESCROW PURSUANT TO THE ESCROW AGREEMENT TO COVER THE FORFEITURES ABOVE, THEN,
WITHIN FIVE (5) CALENDAR DAYS OF RECEIVING NOTICE OF THIS FACT FROM VDC, NETWORK
SHALL DELIVER ADDITIONAL VDC SHARES TO VDC FOR CANCELLATION TO COVER ANY SUCH
DEFICIENCY. NETWORK ACKNOWLEDGES AND AGREES THAT THE FORFEITURE OF THE NETWORK
SHARES IS IN ADDITION TO ANY OTHER REMEDIES WHICH VDC MAY HAVE AT LAW, IN
EQUITY, OR OTHERWISE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
PARTIES HEREBY AGREE THAT EVEN IN THE EVENT OF A NETWORK DEFAULT EVENT PURSUANT
TO WHICH THE NETWORK SHARES ARE FORFEITED IN ACCORDANCE WITH THE TERMS OF THE
ESCROW AGREEMENT, NETWORK SHALL STILL BE OBLIGATED TO PAY AND PERFORM UNDER THE
LEASES AND VDC SHALL BE ENTITLED TO RECOVER MONETARY DAMAGES AND ALL OTHER
REMEDIES AVAILABLE AT LAW, EQUITY, OR OTHERWISE.
5. Certain Representations and Warranties of Network.
--------------------------------------------------
(a) Network represents and warrants to VDC as follows:
(1) If Network is a corporation or a company, it is
duly organized or duly formed, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation or formation and has the corporate