Document:

1999-OP41

                                                               Charles W. Mulloy
                                                               Optionee

                            VDC COMMUNICATIONS, INC.
                            ------------------------

                        INCENTIVE STOCK OPTION AGREEMENT
                       UNDER THE VDC COMMUNICATIONS, INC.
               1998 STOCK INCENTIVE PLAN, AS AMENDED (the "Plan")

                  This  Agreement  is made as of  December  21, 1999 (the "Grant
Date") by and between VDC  Communications,  Inc.,  a Delaware  corporation  (the
"Corporation") and Charles W. Mulloy (the "Optionee").

                  WHEREAS,  Optionee is an employee of the Corporation or one of
its  subsidiaries  and the  Corporation  considers it desirable  and in its best
interest that Optionee be given an inducement to acquire a proprietary  interest
in the  Corporation and an incentive to advance the interests of the Corporation
by granting  the  Optionee an option to purchase  shares of common  stock of the
Corporation (the "Common Stock");

                  NOW,  THEREFORE,  the parties hereto,  intending to be legally
bound,  hereby agree that as of the Grant Date,  the  Corporation  hereby grants
Optionee an option to purchase from it, upon the terms and  conditions set forth
in the Plan (a copy of which is attached hereto) and this Agreement, that number
of shares of the authorized and unissued  Common Stock of the  Corporation as is
set forth on Schedule A hereto.

                  1.       Terms of Stock Option.  The option to purchase Common
Stock  granted  herein is subject to the terms,  conditions,  and  covenants set
forth in the Plan as well as the following:

                           (a)      This option  shall  constitute  an Incentive
                                    Stock  Option  which is  intended to qualify
                                    under  Section 422 of the  Internal  Revenue
                                    Code of 1986, as amended;

                           (b)      The per share  exercise price for the shares
                                    subject to this option  shall be the 100% of
                                    the Fair  Market  Value (as  defined  in the
                                    Plan) of the Common Stock on the Grant Date,
                                    which   exercise   price  is  set  forth  on
                                    Schedule A hereto;

                           (c)      This option  shall vest in  accordance  with
                                    the vesting schedule set forth on Schedule A
                                    hereto; and
<PAGE>

                           (d)      No portion of this  option may be  exercised
                                    more  than ten  (10)  years  from the  Grant
                                    Date.

                           (e)      This option shall immediately  expire and be
                                    forfeited   on  July  1,  2000   unless  the
                                    Corporation  does  one of the  following  by
                                    June 30, 2000: (1) the Corporation  acquires
                                    ipx inc.;  or (2) the  Corporation  launches
                                    its Internet  protocol  telephony  strategy.
                                    The  determination  of whether either of the
                                    two foregoing  events occurs shall be in the
                                    sole   discretion  of  the  Chief  Executive
                                    Officer of the Corporation.

                  2.       Payment  of  Exercise  Price.   The  option  may   be
exercised,  in part or in whole,  only by  written  request  to the  Corporation
accompanied by payment of the exercise price in full either: (i) in cash for the
shares  with  respect  to  which  it is  exercised;  (ii) by  delivering  to the
Corporation   a  notice  of  exercise  with  an   irrevocable   direction  to  a
broker-dealer  registered under the Securities Exchange Act of 1934, as amended,
to sell a  sufficient  portion  of the  shares  and  deliver  the sale  proceeds
directly to the Corporation to pay the exercise  price;  (iii) in the discretion
of  the  Plan  Administrator,   through  the  delivery  to  the  Corporation  of
previously-owned  shares of Common Stock  having an aggregate  Fair Market Value
equal to the option exercise price of the shares being purchased pursuant to the
exercise of the Option; provided, however, that shares of Common Stock delivered
in payment of the option  price must have been held by the Optionee for at least
six (6)  months in order to be  utilized  to pay the option  price;  (iv) in the
discretion  of the Plan  Administrator,  through an  election  to have shares of
Common Stock  otherwise  issuable to the  Optionee  withheld to pay the exercise
price  of such  Option;  or (v) in the  discretion  of the  Plan  Administrator,
through any combination of the payment procedures set forth in Subsections (i) -
(iv) of this paragraph.

                  3.       Miscellaneous.

                           (a)      This  Agreement and the options  represented
                                    hereby may not be assigned or transferred in
                                    any manner  except by will or by the laws of
                                    descent  and  distribution  or pursuant to a
                                    domestic relations order.

                           (b)      This   Agreement   will  be   governed   and
                                    interpreted  in accordance  with the laws of
                                    the  State  of   Connecticut,   and  may  be
                                    executed in more than one counterpart,  each
                                    of  which  shall   constitute   an  original
                                    document.

                           (c)      No  alterations,   amendments,   changes  or
                                    additions to this  Agreement will be binding
                                    upon  either  the  Corporation  or  Optionee
                                    unless reduced to writing and signed by both
                                    parties.

                                       2
<PAGE>

                           (d)      All  controversies  or claims arising out of
                                    this   Agreement   shall  be  determined  by
                                    binding   arbitration,   conducted   at  the
                                    Corporation's    offices    in    Greenwich,
                                    Connecticut,   or  at  such  other  location
                                    designated  by the  Corporation,  before the
                                    American Arbitration Association.

                           (e)      No    rule   of    construction    requiring
                                    interpretation  against the  drafting  party
                                    shall  apply to the  interpretation  of this
                                    Agreement.

                           (f)      If any  provision of this  Agreement is held
                                    to  be  invalid,  the  remaining  provisions
                                    shall remain in full force and effect.

         In witness whereof,  the parties have executed this Agreement as of the
Grant Date.

                                  CORPORATION:

                                  VDC COMMUNICATIONS, INC.

                                  By:   /s/Frederick A. Moran
                                        ---------------------
                                           Frederick A. Moran
                                           Chief Executive Officer

                                    OPTIONEE:

                                    /s/ Charles W. Mulloy
                                    ---------------------
                                    Charles W. Mulloy

                                       3
<PAGE>

                                                               Charles W. Mulloy
                                                               Optionee

                                   Schedule A

1. Grant Date:  December 21, 1999

2. Number of Shares of Common Stock covered by the Option: 50,000

3. Exercise Price (100% of Fair Market Value of Common Stock on the Grant Date):
   $1.00

4. The Option shall vest in accordance with the following schedule:

         (i)      10,000 shares shall vest on the first anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation,  or its  subsidiaries,  from  December  21,  1999
                  through December 20, 2000;

         (ii)     10,000  shares  shall  vest on the second  anniversary  of the
                  Grant Date, provided Optionee remains continuously employed by
                  the Corporation,  or its subsidiaries,  from December 21, 1999
                  through December 20, 2001;

         (iii)    10,000 shares shall vest on the third anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation,  or its  subsidiaries,  from  December  21,  1999
                  through December 20, 2002;

         (iv)     10,000  shares  shall  vest on the fourth  anniversary  of the
                  Grant Date, provided Optionee remains continuously employed by
                  the Corporation,  or its subsidiaries,  from December 21, 1999
                  through December 20, 2003; and

         (v)      10,000 shares shall vest on the fifth anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation,  or its  subsidiaries,  from  December  21,  1999
                  through December 20, 2004.

                                       4RELEASE AGREEMENT
                                -----------------

         THIS RELEASE  AGREEMENT  (the  "Agreement"),  is made as of December 6,
1999 by and among ZIONS CREDIT  CORPORATION,  VDC  COMMUNICATIONS,  INC. AND VDC
TELECOMMUNICATIONS, INC.

                                    RECITALS:
                                    ---------

         WHEREAS,  the parties to this Agreement wish to resolve certain matters
between them.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements set forth in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree as follows:

         1.       Payment.   Contemporaneously   with   the  delivery   of  this
Agreement  to Zions  Credit  Corporation  ("Zions"),  VDC  Communications,  Inc.
("VDC")  and  VDC  Telecommunications,  Inc.  ("VDC  Telecommunications")  shall
deliver to Zions an aggregate of TEN DOLLARS ($10.00).

         2.       Release and Certain Covenants.

                  2.1      Zions  and  all  of  its  subsidiaries,   affiliates,
officers,   directors,   shareholders,   agents,   attorneys,   representatives,
predecessors,  successors  and  assigns,  do hereby  fully and  forever  remise,
release,  acquit and forever  discharge  VDC, VDC  Telecommunications  and their
parent  corporations,   subsidiaries,   affiliates,  predecessors,   successors,
assigns, and all of their present and former officers, directors,  shareholders,
employees,  agents,  representatives,   attorneys,  insurers,  and  all  of  the
foregoing's  present  and  former  officers,  directors,  partners,  principals,
employees,  shareholders,  trustees,  attorneys,  insurers, and their respective
spouses, successors, heirs, executors, estates, administrators, representatives,
attorneys and agents  (collectively,  the "Released Parties"),  from and against
all claims,  causes of action,  demands, or suits of any kind, known or unknown,
arising out of or related in any way to the Master  Finance Lease by and between
Zions, VDC Corporation Ltd. and VDC  Telecommunications,  dated November 3, 1998
(including   an  Equipment   Schedule  by  and  between   Zions,   VDC  and  VDC
Telecommunications  dated  November  3, 1998)  which  Zions,  its  subsidiaries,
affiliates,    officers,    directors,    shareholders,    agents,    attorneys,
representatives,  predecessors,  successors and/or assigns had, now have, or may
in the future have whatsoever, in law or in equity or otherwise.

                  2.2      Zions  for  itself  and  each  of  its  subsidiaries,
affiliates,    officers,    directors,    shareholders,    agents,    attorneys,
representatives,  predecessors, successors and assigns covenants and agrees that
neither it, nor any person, organization or other entity on its or their behalf,
will file, charge, claim, sue or cause or permit to be filed, charged or claimed

                                  Page 1 of 3

<PAGE>

any  action  for  legal or  equitable  relief  (including  damages,  injunctive,
declaratory,  monetary or other relief) involving any matter within the scope of
the Release in Section 2.

                  2.3      Zions  for  itself  and  each  of  its  subsidiaries,
affiliates,    officers,    directors,    shareholders,    agents,    attorneys,
representatives,  predecessors, successors and assigns covenants and agrees that
neither it, nor any person,  organization or other entity on its or their behalf
will provide any assistance or advisory services efforts (unless required by law
or  compelled  by legal  process) to any third  parties in  connection  with any
disputes,  claims  or legal  proceedings  between  such  third  parties  and the
Released Parties, or any one of them.

                  2.4      Zions   represents   and   warrants   that:   (1) the
execution,  delivery and  performance of this Agreement are within the powers of
Zions,  have been duly  authorized and will not constitute or result in a breach
or default under, or conflict with, any order, ruling or regulation of any court
or other tribunal or of any governmental  commission or agency, or any agreement
or other  undertaking,  to which Zions is a party or by which it is bound;  this
Agreement  constitutes  the  legal,  valid  and  binding  obligation  of  Zions,
enforceable in accordance with its terms; and (2) Zions has not sold,  assigned,
transferred,  conveyed,  or otherwise  disposed of any of the claims  within the
scope of the Release in Section 2.

                  2.5      Zions shall indemnify and hold harmless  the Released
Parties, and each one of them, from and against all damages, expenses, costs and
attorneys'  fees which the Released  Parties,  or any one of them, may suffer or
incur by  reason of breach of any of the  provisions  of this  Agreement  or the
inaccuracy of Section 2.4 hereof.

         3.       Miscellaneous.

                  3.1      If any provision  of this Agreement  is held  invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this  Agreement  will remain in full force and  effect.  Any  provision  of this
Agreement  held invalid or  unenforceable  only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

                  3.2      This  Agreement may  not be changed except in writing
signed by the person(s) against whose interest such change shall operate.

                  3.3      This Agreement shall be construed in accordance  with
the laws of the State of Connecticut.  Zions  acknowledges that it has read this
Agreement and has received the advice of counsel with respect hereto.

                  3.4      This  Agreement  may   be   executed   by   facsimile
signature.

                                  Page 2 of 3
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first above written.

Sworn and Subscribed to                        ZIONS CREDIT CORPORATION
before me this 6th  day of
December, 1999.                                By:/s/Norman Weldon
                                                  -------------------
                                                     Signature
                                               Norman Weldon
                                               -------------
                                               Print Name
/s/ unreadable
--------------
         Notary Public                         VP
                                               -------------
                                               Title

Sworn and Subscribed to                        VDC COMMUNICATIONS, INC.
before me this 6th day of
December, 1999.                                By:/s/ Frederick A. Moran
                                                  ----------------------
                                                      Frederick A. Moran
                                                      Chairman & CEO

/s/ Joan Moran
--------------
         Notary Public

Sworn and Subscribed to                        VDC TELECOMMUNICATIONS, INC.
before me this 6th day of
December, 1999                                 By:/s/ Frederick A. Moran
                                                  ----------------------
                                                      Frederick A. Moran
                                                      President

/s/ Joan Moran
--------------
         Notary Public

                                  Page 3 of 3

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