GUARANTY
THIS GUARANTY ("Guaranty") is made as of the 1st day of August, 1998, by
ACTIVATED COMMUNICATIONS LIMITED PARTNERSHIP, a Texas limited partnership
("Guarantor"), to VDC CORPORATION LTD., a Bermuda corporation ("VDC").
WHEREAS, the Guarantor is the record and beneficial owner of 80% of the
membership interests of Masatepe Communications U.S.A., L.L.C., a Delaware
limited liability company ("Masatepe");
WHEREAS, Xxxx Xxxxxxxx, an individual residing at 000 Xxxx 00xx Xxxxxx,
Xxxxxxxxx 0X, Xxx Xxxx, XX 00000 ("Xxxxxxxx"), is the record and beneficial
owner of 20% of the membership interests of Masatepe;
WHEREAS, Guarantor, Xxxxxxxx and VDC have entered into a certain Purchase
Agreement of even date herewith (the "Purchase Agreement") pursuant to which VDC
shall acquire 100% of the membership interests of Masatepe from the Guarantor
and Xxxxxxxx;
WHEREAS, under the terms of the Purchase Agreement and a certain Escrow
Agreement of even date herewith among Guarantor, Xxxxxxxx, VDC and Xxxxxxxx
Ingersoll Professional Corporation, as Escrow Agent (the "Escrow Agent"), the
Cash Escrow Fund and the Accounts Receivable Escrow Fund are not to be released
from escrow until the FCC Approval Date;
WHEREAS, to secure any amounts advanced in the Ordinary Course of Business
by VDC to Masatepe after the Closing Date and prior to the FCC Approval Date,
the VDC and Masatepe have entered into a Bridge Loan Agreement of even date
herewith, pursuant to which Masatepe will deliver to VDC a Bridge Note
evidencing the indebtedness of Masatepe to VDC thereunder (the "Bridge Note");
WHEREAS, the execution and delivery of this Guaranty is a condition
precedent to VDC's entering into, and closing on the transactions contemplated
by, the Purchase Agreement.
TO INDUCE VDC TO ENTER INTO THE PURCHASE AGREEMENT AND THE LOAN AGREEMENT
and for other good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound, Guarantor hereby covenants and
agrees as follows:
1. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
2. Guarantor hereby unconditionally guarantees and becomes surety as for
the full and timely payment by Masatepe to VDC of the obligation of Masatepe to
pay the entire principal amount of the Bridge Note, together with interest
accrued thereon, as such sum may be adjusted and determined pursuant to the
Bridge Loan Agreement (hereinafter collectively referred to as the "Guaranteed
Obligations"):
3. If the Purchase Agreement is terminated in accordance with its terms,
Guarantor agrees to make such full payment to VDC after the occurrence of all of
the following events: (i) VDC has made a written demand (the "First Demand") on
Masatepe for payment of amounts due and owing VDC under the Bridge Note; (ii)
VDC has not received payment of such amount within thirty days after the
delivery of the First Demand; (iii) after the occurrence of the events described
in clause (i) and (ii) of this paragraph, VDC has delivered a written demand to
the Guarantor for payment of amounts due and owing VDC.
4. Guarantor warrants to VDC that: (i) no other agreement, representation
or special condition exists between Guarantor and Masatepe regarding the
liability of Guarantor hereunder nor does any understanding exist between
Guarantor and Masatepe that the obligations of Guarantor hereunder are or will
be other than as set forth herein and (ii) as of the date hereof, the Guarantor
has no defense whatsoever to any action or proceeding that may be brought to
enforce this Guaranty.
5. The parties hereto agree that no waiver or modification of any rights of
VDC under this Guaranty shall be effective unless in writing and signed by VDC.
Guarantor further agrees that each written waiver shall extend only to the
specific instance actually recited in such written waiver and shall not impair
the rights of VDC in any other respect.
6. Guarantor unconditionally agrees to pay all costs and expenses,
including reasonable attorney's fees, incurred by VDC in enforcing this Guaranty
against Guarantor in the event that Guarantor refuses or fails to make payment
when required under Section 2 of this Guaranty.
7. Guarantor's obligation to make payment under this Guaranty shall be
discharged in full upon the occurrence of either (i) the FCC Approval Date, or
(ii) the date upon which Guarantor makes full payment of the Guaranteed
Obligations to VDC.
8. Guarantor hereby makes the following representations and warranties to
VDC:
(a) this Guaranty constitutes the legal, valid and binding obligation of
the Guarantor, enforceable against its successors and assigns in
accordance with its terms;
(b) the Guarantor has full power and authority to enter into, execute,
deliver and carry out this Guaranty and to perform its obligations
hereunder; and
(c) the person executing this Guaranty on behalf of the Guarantor is
authorized to do so.
9. Guarantor and VDC agree that this Guaranty and the rights and
obligations of the parties hereto shall for all purposes be governed by and
construed and enforced in accordance with the substantive law of the State of
Delaware without giving effect to its principles of conflict of laws.
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10. Guarantor agrees that this Guaranty shall be binding upon Guarantor,
its successors and assigns. Guarantor further agrees that this Guaranty shall
inure to the benefit of VDC and its successors and assigns.
11. Guarantor agrees that if Guarantor fails to perform any covenant or
agreement hereunder and if Masatepe fails to pay amounts due VDC under the
Bridge Loan Agreement and Bridge Note, all or any part of the Guaranteed
Obligations may be declared to be forthwith due and payable and, in any case
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived.
12. Guarantor agrees that all notices, statements, requests, demands and
other communications under this Guaranty shall be given to Guarantor at the
address and in the manner provided in the Purchase Agreement.
13. Guarantor hereby irrevocably consents and submits to the exclusive
personal jurisdiction of the courts of the State of Delaware and the United
States District Court for the District of Delaware over any suit, action or
other proceeding arising out of or relating to this Guaranty and irrevocably
agrees that all or other proceeding arising out of or relating to this Guaranty
and irrevocably agrees that all claims with respect to such suit, action or
other proceeding may be made in the manner hereinabove set forth for the giving
of notices, and the same shall constitute valid personal service for all
purposes, each party hereby waiving personal service by any other means.
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IN WITNESS WHEREOF, Guarantor and VDC, intending to be legally bound, have
executed this Guaranty as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.
WITNESS: ACTIVATED COMMUNICATIONS LIMITED
PARTNERSHIP
By: Cellular Dynamics, Inc., its General Partner
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, Vice President
ATTEST: VDC CORPORATION LTD.
By: /s/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx X. Xxxxx,
Chief Executive Officer
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