Exhibit 10.59

 

ARRANGEMENT AGREEMENT

 

THIS ARRANGEMENT AGREEMENT dated as of January 23, 2009,

 

B E T W E E N:

 

VeriSign, Inc., a corporation incorporated under the laws of the State of
Delaware (the “Acquiror”)

 

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Certicom Corp., a corporation continued under the laws of Canada (“Certicom” or
the “Company”)

 

WHEREAS upon the terms and subject to the conditions of this Arrangement
Agreement, the Parties hereto intend to propose the Arrangement;

 

WHEREAS Certicom wishes to support and facilitate the Arrangement on the terms
and subject to the conditions set forth in this Arrangement Agreement and the
Board has concluded that it is in the best interests of Certicom to consummate
the Arrangement, on the terms and subject to the conditions set forth in this
Arrangement Agreement, in which Certicom would become a wholly-owned subsidiary
of the Acquiror, and the Board has unanimously approved this Arrangement
Agreement and intends to recommend that the Arrangement Resolution be approved
by the Certicom Shareholders, on the terms and subject to the conditions of this
Arrangement Agreement;

 

WHEREAS the Acquiror and Certicom desire to make certain representations,
warranties, covenants and agreements in connection with the Arrangement and also
to prescribe various conditions to the Arrangement;

 

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
Parties hereto agree as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1 Definitions

 

In this Arrangement Agreement, unless the context otherwise requires:

 

“Acquiror” has the meaning ascribed thereto in the Preamble;

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“Acquisition Proposal” means any merger, amalgamation, take-over bid, tender
offer, arrangement, recapitalization, liquidation, dissolution, share exchange,
material sale of assets (or any lease, license agreement, technology partnering
arrangement or other arrangement having the same economic effect as a material
sale of assets), any material sale of securities of Certicom or rights or
interests therein or thereto, or similar transactions involving Certicom and/or
its Subsidiaries, or a proposal or offer to do so, or any modification or
proposed modification of any of the foregoing, excluding the Arrangement or any
transaction to which the Acquiror or a Subsidiary of the Acquiror is a party;

 

“affiliate” has the meaning ascribed thereto in the Securities Act;

 

“Ancillary Software IP” has the meaning given to it in Section 3.1(o);

 

“Arrangement” means the arrangement involving the Acquiror and the Company under
the provisions of section 192 of the CBCA on the terms and conditions set forth
in this Arrangement Agreement resulting, inter alia, in the direct acquisition
by the Acquiror of all of the outstanding Certicom Shares, all on such terms as
are consistent with the provisions hereof, all as more particularly described in
the Plan of Arrangement, subject to any amendments, revisions, updates or
supplements thereto made in accordance with Section 2.10 or the Plan of
Arrangement or made at the direction of the Court in the Final Order;

 

“Arrangement Agreement” means this arrangement agreement dated as of the date
hereof between the Acquiror and Certicom, as it may be amended from time to time
in accordance with its terms;

 

“Arrangement Resolution” means the special resolution of the Certicom
Shareholders approving the Arrangement to be considered at the Special Meeting,
substantially in the form of Exhibit A, and any amendments or variations thereto
made in accordance with the provisions of this Arrangement Agreement or made at
the direction of the Court in the Interim Order;

 

“Articles of Arrangement” means the articles of arrangement of the Company to be
filed with the Director in connection with the Arrangement after the Final Order
is made in order for the Arrangement to become effective;

 

“Bankruptcy and Equity Exception” has the meaning given to it in Section 3.1(d);

 

“Baseline Financials” has the meaning given to it in Section 3.1(e);

 

“Benefit Agreements” has the meaning given to it in Section 3.1(f);

 

“Benefit Plans” has the meaning given to it in Section 3.1(j);

 

“Board” means the board of directors of Certicom;

 

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“Business Day” means any day, other than a Saturday, a Sunday and a statutory
holiday in Toronto, Ontario, Canada or New York, N.Y., United States of America;

 

“Cash Proceeds per Share” shall mean $2.10 cash, subject to adjustment in
accordance with Section 2.6 of the Plan of Arrangement;

 

“CBCA” means the Canada Business Corporations Act and the regulations made
thereunder, as promulgated or amended from time to time;

 

“Certicom” or the “Company” means Certicom Corp., a corporation continued under
the laws of Canada;

 

“Certicom Data Rooms” means the Certicom data rooms posted on the www.
intralinks.com web site under the project name “Project Sentinel” and located at
the offices of Blake, Cassels & Graydon LLP in Toronto, Ontario as in effect on
January 22, 2009;

 

“Certicom IP” has the meaning given to it in Section 3.1(o);

 

“Certicom Licensed IP” has the meaning given to it in Section 3.1(o);

 

“Certicom Option” means any existing right or option to purchase Certicom Shares
outstanding under the Certicom Stock Option Plans;

 

“Certicom Owned IP” has the meaning given to it in Section 3.1(o);

 

“Certicom Personnel” has the meaning given to it in Section 3.1(f);

 

“Certicom Shares” means the common shares in the capital of Certicom;

 

“Certicom Shareholders” means the holders of Certicom Shares (including both
registered and beneficial holders);

 

“Certicom Stock Option Plans” means (a) the 1997 Stock Option Plan, as amended
as of October 19, 2000 and September 20, 2007, of Certicom, (b) the March 25,
2000 U.S. Stock Option Plan, as amended as of September 20, 2007, of Certicom,
and (c) the 2000 Directors’ Incentive Plan of Certicom, collectively;

 

“Charter Documents” means articles and by-laws and similar constating documents
of a corporation;

 

“Closing Date” means the earlier of: (a) the date that is three Business Days
after the satisfaction or waiver (subject to applicable Laws) of the conditions
set forth in Article 6 (other than the delivery of items to be delivered on the
Effective Date and the satisfaction of those conditions that, by their terms,
cannot be satisfied until immediately prior to the Effective Date, but subject
to the satisfaction or, where permitted, waiver of those conditions as of the
Effective Date); (b) the date that is the day prior to the Outside Date,
provided that the conditions set forth in Article 6 have been satisfied or,
where permitted,

 

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waived (other than the delivery of items to be delivered on the Effective Date
and the satisfaction of those conditions that, by their terms, cannot be
satisfied until immediately prior to the Effective Date, but subject to the
satisfaction or, where permitted, waiver of those conditions as of the Effective
Date); and (c) such date as mutually agreed in writing by the Company and the
Acquiror;

 

“Commonly Controlled Entity” has the meaning given to it in Section 3.1(j);

 

“Confidentiality Agreement” means the non-disclosure and standstill letter
agreement dated December 10, 2008 between the Acquiror and Certicom providing
the Acquiror access to confidential information of Certicom;

 

“Contract” means any loan or credit agreement, bond, debenture, note, mortgage,
indenture, Guarantee, lease or other contract, commitment, agreement,
instrument, arrangement, obligation, undertaking or license, whether oral or
written (each, including all amendments thereto);

 

“CSA” means the Canadian Securities Administrators;

 

“CSA Documents” has the meaning given to it in Section 3.1(e);

 

“Court” means the Ontario Superior Court of Justice (Commercial List);

 

“Customer Contract” means (a) any Contract with a customer of Certicom or any of
its Subsidiaries who is currently active on maintenance or support or has been
since May 1, 2007, (b) any Contract with a customer of Certicom or any of its
Subsidiaries who has paid royalties since May 1, 2007, or under which Contract
royalties are payable, to Certicom or any of its Subsidiaries, (c) any Contract
pursuant to which Certicom or any of its Subsidiaries has explicitly licensed
patent rights to any person, or (d) any Contract otherwise material to Certicom
and its Subsidiaries on a consolidated basis;

 

“Depository” means Computershare Trust Company of Canada;

 

“Derivative Work” has the meaning given to it in Section 3.1(o);

 

“Director” means the Director appointed pursuant to section 260 of the CBCA;

 

“Disclosure Letter” has the meaning given to it in Section 3.1;

 

“Dissent Rights” means the rights of dissent in favour of Certicom Shareholders
in respect of the Arrangement as contemplated in the Plan of Arrangement;

 

“Effective Date” means the date upon which the Arrangement becomes effective as
established by the date of issue shown on the certificate giving effect to the
Arrangement issued by the Director pursuant to the CBCA;

 

“Effective Time” means the first moment in time in Toronto on the Effective
Date;

 

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“Environmental Claims” has the meaning given to it in Section 3.1(k);

 

“Environmental Law” has the meaning given to it in Section 3.1(k);

 

“Executive Retention Agreements” means, collectively, the retention agreements
dated as of December 22, 2008 between Certicom and each of Hervé Séguin, Frank
Cotter, Jim Alfred, Ross Bennett, William Lattin, David Lewis and Karna Gupta;

 

“Fairness Opinion” means an opinion of the financial advisor to the Board or an
opinion of the financial advisor to the Special Committee of the Board, in each
ease, as of the date of this Arrangement Agreement, that the Arrangement is
fair, from a financial point of view, to the Certicom Shareholders (other than
the Acquiror), in form and substance satisfactory to the Board;

 

“Filed CSA Document” has the meaning given to it in Section 3.1(e);

 

“Final Order” means the order of the Court approving the Arrangement as such
order may be amended by the Court (with the consent of the Company and the
Acquiror, each acting reasonably) at any time prior to the Effective Date or, if
appealed, then unless such appeal is withdrawn or denied, as affirmed or amended
(provided that any such amendment shall be acceptable to the Acquiror and the
Company, each acting reasonably) on appeal;

 

“Financial Indebtedness” means in relation to a person (the “debtor”), an
obligation or liability (contingent or otherwise) of the debtor (a) for borrowed
money (including overdrafts and including amounts in respect of principal,
premium, interest or any other sum payable in respect of borrowed money) or for
the deferred purchase price of property or services, (b) under any loan, stock,
bond, note, debenture or other similar instrument or debt security, (c) under
any acceptance credit, bankers’ acceptance, Guarantee, letter of credit or other
similar facilities, (d) under any conditional sale, hire purchase or title
retention agreement with respect to property, under any capitalized lease
arrangement, under any sale and lease back arrangement or under any lease or any
other agreement having the commercial effect of a borrowing of money or treated
as a finance lease or capital lease in accordance with applicable accounting
principles, (e) under any foreign exchange transaction, any interest or currency
swap transaction, any fuel or commodity hedging transaction or any other kind of
derivative transaction, (f) in respect of any counter-indemnity obligation in
respect of a Guarantee, indemnity, bond, standby or documentary letter of credit
or any other instrument issued by a bank or financial institution, (g) in
respect of preferred stock (namely capital stock of any class that is preferred
as to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution, over the
capital stock of any other class) or redeemable capital stock (namely any class
or series of capital stock that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or by contract or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed on a specified date or is redeemable at the option of
the holder thereof at any time, or is convertible into or exchangeable for debt
securities at any time), or (h) for any amount raised under any transaction
similar in

 

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nature to those described in paragraphs (a) to (g) of this definition, or
otherwise having the commercial effect of borrowing money, or (i) under a
Guarantee, indemnity or similar obligation entered into by the debtor in respect
of an obligation or liability of another person which would fall within
paragraphs (a) to (h) of this definition if the references to the debtor
referred to the other person; for greater certainty, Financial Indebtedness
includes obligations and liabilities of another person which would fall within
paragraphs (a) to (h) of this definition where such obligations or liabilities
are secured by (or where such other person has a right to require that such
obligations or liabilities be secured by) a security interest over any property
of the debtor even though the debtor has not assumed or become liable for the
payment of such obligations or liabilities or receivables sold, assigned, or
discounted;

 

“GAAP” has the meaning given to it in Section 3.1(e);

 

“Government Contract” has the meaning given to it in Section 3.1(u);

 

“Governmental Entity” means any (a) multinational, federal, provincial,
territorial, state, municipal, local or other governmental or public department,
central bank, court, commission, commissioner (including the Commissioner of
Competition appointed pursuant to the Competition Act (Canada)), tribunal
(including the Competition Tribunal established under the Competition Tribunal
Act (Canada)), board, bureau, agency or instrumentality, domestic or foreign,
(b) any subdivision or authority of any of the foregoing, (c) any
quasi-governmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the above, or (d) stock
exchange, automated quotation system, self regulatory authority or securities
regulatory authority, including, without limitation, the TSX;

 

“Grant Date” has the meaning given to it in Section 3.1(c);

 

“Guarantee” of or by any person means any obligation, contingent or otherwise,
of such person guaranteeing any Financial Indebtedness of any other person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Financial
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Financial Indebtedness, (b) to purchase
property, securities or services for the purpose of assuring the owner of such
Financial Indebtedness of the payment of such Financial Indebtedness or (c) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Financial Indebtedness; provided, however, that the term Guarantee shall
not include endorsements for collection or deposit, in each case in the ordinary
course of business;

 

“including” means including without limitation, and “include” and “includes”
have a corresponding meaning;

 

“Intellectual Property” has the meaning given to it in Section 3.1(o);

 

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“Interim Order” means the interim order of the Court to be made pursuant to the
application therefor contemplated by Section 2.4 of this Arrangement Agreement,
such order to be applied for substantially in the form of Exhibit B;

 

“IP Contributing Parties” has the meaning given to it in Section 3.1(o);

 

“Judgment” has the meaning given to it in Section 3.1(d);

 

“Law” or “Laws” means all international trade agreements, codes and conventions,
laws, by-laws, statutes, rules, regulations, principles of law and equity,
orders, rulings, ordinances, judgements, injunctions, determinations, awards,
decrees or other requirements and the terms and conditions of any grant of
approval, permission, authority or license of any Governmental Entity, and the
term “applicable” with respect to such Laws and in a context that refers to one
or more Parties, means such Laws as are applicable to such Party or its
business, undertaking, property or securities and emanate from a person having
jurisdiction over the Party or Parties or its or their business, undertaking,
property or securities;

 

“Leased Real Property” has the meaning given to it in Section 3.1(n);

 

“Liens” means any pledges, claims, liens, charges, options, hypothecs,
mortgages, security interests, restrictions, adverse rights or any other
encumbrances of any kind or nature whatsoever;

 

“Litigation” means suit, claim, action, arbitration, investigation or judicial,
administrative and regulatory proceeding;

 

“Mailing Deadline” has the meaning given to it in Section 2.7;

 

“Major Customer” has the meaning given to it in Section 3.1(h);

 

“Major Customer Contract” has the meaning given to it in Section 3.1(h);

 

“Major Supplier” has the meaning given to it in Section 3.1(h);

 

“Major Supplier Contract” has the meaning given to it in Section 3.1(h);

 

“Material Adverse Effect” means any fact, change, development, event,
occurrence, action, omission or effect that, individually or in the aggregate,
results in or is reasonably likely to result in (a) a material adverse effect on
the business, assets, properties, financial condition or results of operations
of Certicom and its Subsidiaries, taken as a whole or (b) that would prevent or
materially impede or delay the completion of the Arrangement, other than any
fact, change, development, event, occurrence, action, omission or effect
relating to or arising in connection with (i) changes, developments, or events
affecting the industry in general in which Certicom primarily operates, to the
extent that they do not materially disproportionately affect Certicom and its
Subsidiaries, taken as a whole, in relation to other companies in the industry
in which Certicom primarily operates, (ii) the economy in general, or financial
or capital markets in general, in the United States or

 

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Canada or elsewhere in the world, to the extent that they do not materially
disproportionately affect Certicom and its Subsidiaries, taken as a whole, in
relation to other companies in the industry in which Certicom primarily
operates, (iii) changes (after the date of this Arrangement Agreement) in Law or
in generally accepted accounting principles or in accounting standards, (iv) the
announcement or pendency of this Arrangement Agreement or the anticipated
consummation of the Arrangement, or the completion of the transactions
contemplated by this Arrangement Agreement including the impact thereof on
relationships, contractual or otherwise, with employees, customers, suppliers,
distributors or partners, (v) acts of war, sabotage or terrorism, or any
escalation or worsening of any such acts of war, sabotage or terrorism
threatened or underway as of the date of this Arrangement Agreement to the
extent that they do not materially disproportionately affect Certicom and its
Subsidiaries, taken as a whole, in relation to other companies in the industry
in which Certicom primarily operates, (vi) earthquakes, hurricanes, tornados or
other natural disasters to the extent that they do not materially
disproportionately affect Certicom and its Subsidiaries, taken as a whole, in
relation to other companies in the industry in which Certicom primarily operates
or (vii) any decline in the market price, or change in trading volume, of
Certicom Shares or any failure to meet publicly announced revenue or earnings
projections or internal projections (it being understood that, without limiting
the applicability of the provisions contained in clauses (i) through (vi) above,
the cause or causes of any such decline, change or failure may be deemed to
constitute, in and of itself and themselves, a Material Adverse Effect and may
be taken into consideration when determining whether a Material Adverse Effect
has occurred);

 

“material fact” has the meaning ascribed thereto in the Securities Act;

 

“Meeting Deadline” has the meaning given to it in Section 2.2(4);

 

“Misrepresentation” has the meaning ascribed to “misrepresentation” in the
Securities Act;

 

“Optionholders” means the holders of Certicom Options;

 

“Option Consideration” has the meaning given to it in Section 2.6;

 

“ordinary course of business”, “ordinary course of business consistent with past
practice”, or any similar reference, means, with respect to an action taken by a
person, that such action is consistent with the past practices of such person
and is taken in the ordinary course of the normal day-to-day business and
operations of such person; provided that in any event such action is not
unreasonable;

 

“Out-of-Money Option” has the meaning given to it in Section 2.16(2);

 

“Outside Date” means April 30, 2009 or such later date as may be agreed to in
writing by the Parties;

 

“Parties” means Certicom and the Acquiror, and “Party” means either of them;

 

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“Permit” means any certificate, permit, license, franchise, approval,
concession, qualification, registration, certification or other authorization of
and from any Governmental Entity;

 

“Permitted Liens” has the meaning given to it in Section 3.1(h);

 

“person” includes an individual, limited or general partnership, limited
liability company, limited liability partnership, joint venture, association,
body corporate, unincorporated organization, trustee, executor, administrator,
legal representative, government (including any Governmental Entity) or any
other entity, whether or not having legal status;

 

“Plan of Arrangement” means, in relation to the Arrangement, the plan of
arrangement in the form and having the content of Exhibit C and any amendments,
revisions, updates or supplements thereto made in accordance with the provisions
hereof or thereof or made at the direction of the Court in the Final Order (with
the consent of the Acquiror and Certicom, each acting reasonably);

 

“Pre-Acquisition Reorganization” has the meaning given to it in Section 5.2(e);

 

“Proxy Circular” means the notice of meeting and management information circular
of the Company to be prepared and sent to Certicom Shareholders in connection
with the Special Meeting, including the exhibits thereto;

 

“Registered Certicom IP” has the meaning given to it in Section 3.1(o);

 

“Response Period” has the meaning ascribed thereto in Section 7.2(1)(b);

 

“Securities Act” means the Securities Act (Ontario) and the rules, regulations
and published policies made thereunder, as now in effect and as they may be
promulgated or amended from time to time;

 

“Securities Laws” means the Securities Act and all other applicable Canadian
provincial securities laws, rules and regulations thereunder;

 

“Shareholder Approval” means approval of the Arrangement Resolution by not less
than two-thirds of the votes cast by Certicom Shareholders who are present in
person or represented by proxy at the Special Meeting, in accordance with
applicable Laws and the Interim Order;

 

“Shareholder Rights Plan” means the Shareholder Rights Plan Agreement adopted on
September 22, 1997 and amended and restated on October 8, 2003 and ratified and
reconfirmed as of September 21, 2006 between Certicom and Computershare Trust
Company of Canada, as amended from time to time;

 

“Software” has the meaning given to it in Section 3.1(o);

 

“Special Committee” has the meaning given to it in Section 3.1(a);

 

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“Special Meeting” means the special meeting of the Certicom Shareholders
(including any adjournments or postponements thereof) to be called and held
pursuant to the Interim Order to consider and, if thought fit, approve the
Arrangement Resolution;

 

“Specified Contracts” has the meaning given to it in Section 3.1(h);

 

“Stock Option Agreements” has the meaning given to it in Section 3.1(c);

 

a “Subsidiary” of any person shall mean any other person (a) more than 50% of
whose outstanding shares or securities representing the right to vote for the
election of directors or other managing authority of such other person are, now
or hereafter, owned or controlled, directly or indirectly, by such first person,
but such other person shall be deemed to be a Subsidiary only so long as such
ownership or control exists, or (b) which does not have outstanding shares or
securities with such right to vote, as may be the case in a partnership, joint
venture or unincorporated association, but more than 50% of whose ownership
interest representing the right to make the decisions for such other person is,
now or hereafter, owned or controlled, directly or indirectly, by such first
person, but such other person shall be deemed to be a Subsidiary only so long as
such ownership or control exists;

 

“Superior Proposal” has the meaning ascribed thereto in Section 7.1(1);

 

“Tax Act” means the Income Tax Act (Canada), as amended from time to time;

 

“tax return” has the meaning given to it in Section 3.1(m);

 

“taxes” has the meaning given to it in Section 3.1(m);

 

“taxing authority” has the meaning given to it in Section 3.1(m);

 

“Third Party Software” has the meaning given to it in Section 3.1(o);

 

“TO Bid” has the meaning given to it in Section 2.16(2);

 

“TSX” means Toronto Stock Exchange;

 

“Vendor Contract” means a Contract to which Certicom or any of its Subsidiaries
is a party and pursuant to which Certicom or any of Subsidiaries contracts to
purchase or acquire goods and services; and

 

“WTO Investor” has the meaning given to it at subsection 14.1(6) of the
Investment Canada Act (Canada).

 

1.2 Interpretation Not Affected by Headings

 

The division of this Arrangement Agreement into Articles, Sections, subsections
and paragraphs and the insertion of headings are for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Arrangement Agreement. Unless the

 

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contrary intention appears, references in this Arrangement Agreement to an
Article, Section, subsection, paragraph or Schedule by number or letter or both
refer to the Article, Section, subsection, paragraph or Schedule, respectively,
bearing that designation in this Arrangement Agreement.

 

1.3 Number and Gender

 

In this Arrangement Agreement, unless the contrary intention appears, words
importing the singular include the plural and vice versa, and words importing
gender include all genders.

 

1.4 Date for Any Action

 

If the date on which any action is required to be taken hereunder by a Party is
not a Business Day, such action shall be required to be taken on the next
succeeding day which is a Business Day.

 

1.5 Currency

 

Unless otherwise stated, all references in this Arrangement Agreement to sums of
money are expressed in lawful money of the Canada and “$” refers to Canadian
dollars.

 

1.6 Accounting Matters

 

Unless otherwise stated, all accounting terms used in this Arrangement Agreement
in respect of Certicom shall have the meanings attributable thereto under GAAP
and all determinations of an accounting nature in respect of Certicom required
to be made shall be made in a manner consistent with GAAP consistently applied.

 

1.7 Knowledge

 

In this Arrangement Agreement, references to “the knowledge of Certicom” means
the actual knowledge, in their capacity as officers of Certicom and not in their
personal capacity, of Karna Gupta, David Lewis, Hervé Séguin, Frank Cotter,
William Lattin and Ross Bennett, after due inquiry.

 

1.8 Exhibits

 

The following exhibits are annexed to this Arrangement Agreement and are
incorporated by reference into this Arrangement Agreement and form a part
hereof:

 

Exhibit A    -      Arrangement Resolution Exhibit B    -      Interim Order
Exhibit C    -      Plan of Arrangement

 

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ARTICLE 2

THE ARRANGEMENT AND RELATED MATTERS

 

2.1 The Arrangement

 

The Parties agree, on the terms and subject to the conditions of this
Arrangement Agreement, to carry out the Arrangement in accordance with this
Arrangement Agreement on the terms set out in the Plan of Arrangement, subject
to such changes as may be mutually agreed to by the Parties in accordance with
this Arrangement Agreement.

 

2.2 Implementation Steps by the Company

 

The Company covenants in favour of the Acquiror that the Company shall:

 

  (1) subject to compliance with Securities Laws, immediately upon the execution
of this Arrangement Agreement or such later time prior to the opening of markets
as is agreed to by the Parties, issue a press release announcing the entering
into of this Arrangement Agreement, which press release will be satisfactory in
form and substance to each of the Acquiror and the Company, acting reasonably.
The Company will file such press release, together with a material change report
in prescribed form, with applicable securities regulatory authorities in each
province of Canada;

 

  (2) as soon as reasonably practicable after the execution and delivery of this
Arrangement Agreement, and in any event no later than 10 Business Days from the
date hereof (subject to Court availability), bring an application before the
Court pursuant to section 192 of the CBCA for the Interim Order in a manner and
form acceptable to the Acquiror, acting reasonably, providing for, inter alia,
the calling and holding of the Special Meeting, and thereafter proceed with such
application and diligently pursue obtaining the Interim Order;

 

  (3) fix a record date for the purposes of determining the Certicom
Shareholders entitled to receive notice of and vote at the Special Meeting in
accordance with the Interim Order;

 

  (4) convene and hold the Special Meeting as soon as reasonably practicable
with a targeted date on or before March 12, 2009 and in any event on or before
March 25, 2009 (such latter date, the “Meeting Deadline”) in accordance with the
Interim Order and applicable Laws for the purpose of having Certicom
Shareholders consider the Arrangement Resolution and for any other proper
purpose as may be set out in the Proxy Circular (as agreed to with the prior
written consent of the Acquiror); provided that: (i) the Special Meeting shall
be held regardless of whether the Board determines at any time that this
Arrangement Agreement is no longer advisable or recommends that Certicom
Shareholders reject the Arrangement Resolution; and (ii) the Arrangement
Resolution shall be voted on before any other matter at the Special Meeting,
unless otherwise previously agreed to in writing by the Acquiror or required by
a Governmental Entity;

 

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  (5) except to the extent required by a Governmental Entity or for quorum
purposes (in the case of an adjournment), not adjourn, postpone or cancel (or
propose the adjournment, postponement or cancellation of) the Special Meeting
without the Acquiror’s prior written consent, and without limiting the
generality of the foregoing, the Company agrees that its obligations pursuant to
Section 2.2(4) and this Section 2.2(5) shall not be affected by the
commencement, public proposal, public disclosure or communication to the Company
or any other person of any Acquisition Proposal;

 

  (6) include in the Proxy Circular the unanimous recommendation of the Board
that Certicom Shareholders vote in favour of the Arrangement Resolution;

 

  (7) solicit from Certicom Shareholders proxies in favour of the approval of
the Arrangement Resolution and, subject to Section 7.1, against any resolution
submitted by any other Certicom Shareholder, including, if so requested by the
Acquiror, using the services of dealers and proxy solicitation services, and
take all other actions that are reasonably necessary or desirable to seek the
approval of the Arrangement by Certicom Shareholders;

 

  (8) provide notice to the Acquiror of the Special Meeting and allow
representatives of the Acquiror to attend and speak at the Special Meeting;

 

  (9) subject to obtaining all approvals as required by the Interim Order, bring
an application as soon as reasonably practicable after the Special Meeting but
in any event not later than three Business Days thereafter, before the Court
pursuant to section 192 of the CBCA for the Final Order in a manner and form
acceptable to the Acquiror, acting reasonably, and thereafter proceed with and
diligently pursue obtaining the Final Order;

 

  (10) oppose any proposal from any party that the Final Order contain any
provision inconsistent with this Arrangement Agreement, and, if at any time
after the issuance of the Final Order and prior to the Effective Date, Certicom
is required by the terms of the Final Order or by Law to return to Court with
respect to the Final Order, it shall do so after notice to, and in consultation
and cooperation with, the Acquiror;

 

  (11) subject to obtaining the Final Order and the satisfaction or waiver of
the conditions set forth in Article 6, send to the Director, for endorsement and
filing by the Director, the Articles of Arrangement and such other documents as
may be required in connection therewith under the CBCA to give effect to the
Arrangement pursuant to section 192 of the CBCA in a manner and form acceptable
to the Acquiror, acting reasonably; and

 

  (12)

(i) permit the Acquiror (and its outside counsel) to review and comment upon
drafts of all material to be filed by the Company with the Court or any

 

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Governmental Entity in connection with the Arrangement (including the Proxy
Circular and any supplement or amendment contemplated by Section 2.7) prior to
the service (if applicable) and/or filing of such materials, (ii) give the
Acquiror and its counsel reasonable time to review and comment upon such
materials and (iii) accept any reasonable comments of the Acquiror and its
counsel. The Company shall also provide to the Acquiror’s outside counsel on a
timely basis copies of any notice of appearance or other Court documents served
on the Company in respect of the application for the Interim Order or the Final
Order or any appeal therefrom and of any notice, whether written or oral,
received by the Company indicating any intention to oppose the granting of the
Interim Order or the Final Order or to appeal the Interim Order or the Final
Order. The Company will ensure that all materials filed with the Court in
connection with the Arrangement are consistent in all material respects with the
terms of this Arrangement Agreement and the Plan of Arrangement. In addition,
the Company will not object to legal counsel to the Acquiror making such
submissions on the hearing of the motion for the Interim Order and the
application for the Final Order as such counsel considers appropriate, provided
that the Company is advised of the nature of any submissions prior to the
hearing and such submissions are consistent with this Arrangement Agreement and
the Plan of Arrangement;

 

  (13) instruct outside counsel acting for the Company to bring the applications
referred to in Section 2.2(2) and Section 2.2(9) in cooperation with outside
counsel to the Acquiror;

 

  (14) not (i) file any material with the Court in connection with the
Arrangement or serve any such material, and not agree to modify or amend
materials so filed or served, or (ii) send to the Director, for endorsement and
filing by the Director, the Articles of Arrangement, except in either case as
contemplated hereby or with the Acquiror’s prior written consent, such consent
not to be unreasonably withheld or delayed; and

 

  (15) effect all other necessary registrations, filing, applications and
submissions of information required by a Governmental Entity from Certicom in
connection with the Arrangement and, if necessary, participate and appear in any
proceedings of either Party before or by any Governmental Entity.

 

2.3 Implementation Steps by the Acquiror

 

The Acquiror covenants in favour of the Company that it shall:

 

  (1) cooperate with the Company in connection with seeking the Interim Order
and the Final Order, including ensuring that its representatives attend the
hearings in respect of the Interim Order and the Final Order;

 

  (2) cooperate with the Company in connection with the Special Meeting,
including ensuring that its representatives attend the Special Meeting; and

 

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  (3) effect all necessary registrations, filing, applications and submissions
of information required by a Governmental Entity from the Acquiror in connection
with the Arrangement and, if necessary, participate and appear in any
proceedings of either Party before or by any Governmental Entity.

 

2.4 Interim Order

 

The notice of motion for the application for the Interim Order referred to in
Section 2.2(2) shall request that the Interim Order provide:

 

  (1) for confirmation of the record date for the Special Meeting referred to in
Section 2.2(3);

 

  (2) for the classes of persons to whom notice is to be provided in respect of
the Arrangement and the Special Meeting and for the manner in which such notice
is to be provided;

 

  (3) that the requisite approval for the Arrangement Resolution shall be
two-thirds of the votes cast on the Arrangement Resolution by Certicom
Shareholders present in person or represented by proxy at the Special Meeting;

 

  (4) that, in all other respects, the terms, restrictions and conditions of the
Charter Documents of the Company, including quorum requirements and all other
matters, shall apply in respect of the Special Meeting;

 

  (5) for the grant of the Dissent Rights;

 

  (6) for the notice requirements with respect to the making of the application
to the Court for the Final Order;

 

  (7) for such other matters as the Acquiror may reasonably require subject to
obtaining the prior consent of the Company, such consent not to be unreasonably
withheld or delayed; and

 

  (8) that the Special Meeting may be adjourned or postponed from time to time
by the Company in accordance with this Arrangement Agreement without the need
for additional approval by the Court.

 

In the event that the Court does not issue the Interim Order as set forth
herein, the Acquiror will agree to effect the transactions contemplated herein
by way of a take-over bid and to enter into a support agreement with Certicom in
support thereof, having the same terms, to the extent applicable, as this
Arrangement Agreement.

 

2.5 Articles of Arrangement

 

The Articles of Arrangement shall, upon the endorsement of a certificate thereon
by the Director in accordance with the CBCA, with such other matters as are
necessary to effect the Arrangement and subject to the provisions of the Plan of
Arrangement, consummate the Plan of Arrangement. The Articles of Arrangement
shall be in form satisfactory to the Acquiror, acting reasonably.

 

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2.6 Cash Proceeds per Share and Option Consideration

 

Commencing at the Effective Time, pursuant to the Plan of Arrangement, and
subject to the terms and conditions of this Arrangement Agreement and the Plan
of Arrangement:

 

  (a) each Certicom Share in respect of which Dissent Rights have been validly
exercised before the Effective Time shall be transferred and deemed to be
transferred by the registered holder thereof, without any further act or
formality on its part, free and clear of all Liens, to the Acquiror in
consideration for a debt claim against the Acquiror in an amount determined and
payable in accordance with Article 3 of the Plan of Arrangement, and the name of
such holder will be removed from the register of holders of Certicom Shares (in
respect of the Certicom Shares for which Dissent Rights have been validly
exercised before the Effective Time), and the Acquiror shall be recorded as the
registered holder of Certicom Shares so transferred and shall be deemed to be
the legal and beneficial owner of such Certicom Shares free and clear of any
Liens;

 

  (b) all of the Certicom Options granted and outstanding and exercisable to
acquire Certicom Shares immediately prior to the Effective Time shall, without
any further action on behalf of any Optionholder and without any payment except
as provided in the Plan of Arrangement, be disposed of and surrendered by the
holders thereof to Certicom without any act or formality on its or their part in
exchange for a cash amount equal to the excess, if any, of (i) the product of
the number of Certicom Shares underlying such Certicom Options held by such
holder and the Cash Proceeds per Share over (ii) the aggregate exercise price
payable under such Certicom Options by the holder to acquire the Certicom Shares
underlying such Certicom Options (the “Option Consideration”). All Certicom
Options issued and outstanding immediately prior to the Effective Time shall
thereafter immediately be cancelled; and

 

  (c) each holder of Certicom Shares (other than holders who have properly
exercised Dissent Rights) shall be entitled to receive the Cash Proceeds per
Share for each Certicom Share held.

 

2.7 Proxy Circular

 

As promptly as practicable after the execution and delivery of this Arrangement
Agreement, the Company, in consultation with the Acquiror, will prepare and
complete the Proxy Circular together with any other documents required by the
CBCA or other applicable Laws in connection with the Arrangement and the Special
Meeting. The Proxy Circular and such other documents, together with any
amendments thereto, shall be in form and substance satisfactory to the Acquiror
(and the Acquiror’s outside counsel) acting reasonably. The

 

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Company will file the Proxy Circular and any other documentation required to be
filed under the Interim Order and applicable Laws in all jurisdictions where the
Proxy Circular is required to be filed by the Company and mail or cause to be
mailed the Proxy Circular and any other documentation required to be mailed
under the Interim Order and applicable Laws to Certicom Shareholders,
Optionholders, the directors of the Company, the auditors of the Company and any
other required persons with a targeted date of February 12, 2009, and in any
event on or before February 18, 2009 (the “Mailing Deadline”), all in accordance
with the terms of the Interim Order and applicable Laws. The Acquiror will
provide such assistance as the Company may reasonably request in such regard. In
a timely and expeditious manner, the Company shall prepare (in consultation with
the Acquiror) and file amendments or supplements to the Proxy Circular (which
amendments or supplements shall be in a form satisfactory to the Acquiror and
its outside counsel, acting reasonably) required by applicable Laws or as
otherwise agreed between the Company and the Acquiror with respect to the
Special Meeting and mail or otherwise disseminate such amendments or
supplements, as required by the Interim Order and in accordance with all
applicable Laws, to such persons and in all jurisdictions where such amendments
or supplements are required to be mailed or disseminated, complying in all
material respects with all applicable Laws on the date of the mailing or
dissemination thereof.

 

2.8 Preparation of Filings, etc.

 

  (1) The Company shall (with the Acquiror and its outside counsel) diligently
do all such acts and things as may be necessary to comply, in all material
respects, with National Instrument 54-101 of the CSA in relation to the Special
Meeting and, without limiting the generality of the foregoing, shall, in
consultation with the Acquiror, use all reasonable efforts to benefit from the
accelerated timing contemplated by such instrument.

 

  (2) Each of the Acquiror and the Company shall proceed diligently, in a
coordinated fashion and use its commercially reasonable efforts to cooperate in:

 

  (a) the preparation of the Proxy Circular as described in Section 2.7;

 

  (b) the preparation and filing of any exemption or other applications or
orders and any other documents required by any of them to discharge their
respective obligations under applicable Laws in connection with the Arrangement;
and

 

  (c) the taking of all such action as may be required under any applicable
Securities Laws or the CBCA in connection with the Arrangement and the Plan of
Arrangement.

 

  (3) Each of the Acquiror and the Company shall furnish to the other of them,
on a timely basis, all information as may be reasonably required to effect the
actions contemplated by Section 2.8(1) and Section 2.8(2), and each covenants
that no information so furnished by it in writing in connection with those
actions or otherwise in connection with the consummation of the Arrangement will
contain any Misrepresentation. Each of the Parties hereto will ensure that the
information relating to it and its Subsidiaries, which is provided in the Proxy
Circular, will not contain any Misrepresentation.

 

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  (4) Each of the Acquiror and the Company shall promptly notify the other of
them if, at any time before the Effective Time, it becomes aware that the Proxy
Circular or an application for the Interim Order, the Final Order or any other
filing under corporate Laws or Securities Laws contains a Misrepresentation or
otherwise requires an amendment or supplement to the Proxy Circular or such
application. In any such event, each of the parties hereto will co-operate in
the preparation of a supplement or amendment to the Proxy Circular, press
release, newspaper advertisement or such other document, as the case may be,
that corrects that Misrepresentation or effects such amendment or supplement, as
the case may be, and the Company will cause the same to be distributed or
disseminated to the Certicom Shareholders, Optionholders, the directors of the
Company, the auditors of the Company and any other required persons and filed as
required under applicable Laws and in accordance with the terms of the Interim
Order.

 

  (5) The Company shall ensure that the Proxy Circular complies in all material
respects with all applicable Laws and, without limiting the generality of the
foregoing, that the Proxy Circular does not contain a Misrepresentation (other
than with respect to any information provided in writing by the Acquiror or its
outside counsel for the purpose of inclusion in the Proxy Circular). Without
limiting the generality of the foregoing, the Company shall ensure that the
Proxy Circular provides Certicom Shareholders with information in sufficient
detail to permit them to form a reasoned judgment concerning the matters to be
placed before them at the Special Meeting and include in the Proxy Circular a
statement that the Board has determined that the Arrangement is in the best
interests of the Company and that the Board unanimously recommends that
Shareholders vote in favour of the Arrangement Resolution (as contemplated by
Section 2.2(6)).

 

2.9 Dissenting Shareholders

 

The Plan of Arrangement shall provide that registered Certicom Shareholders may
exercise Dissent Rights with respect to their Certicom Shares in connection with
the Arrangement pursuant to and in the manner set forth in the Interim Order and
the Plan of Arrangement. The Company shall give the Acquiror; (a) prompt notice
of any written notice of a dissent, withdrawal of such notice, and any other
instruments served pursuant to such Dissent Rights and received by the Company;
and (b) the opportunity to participate in all negotiations and proceedings with
respect to any such demand, notice or instrument. The Company shall not make any
payment or settlement offer prior to the Effective Time with respect to any such
demand, notice or instrument unless the Acquiror shall have given its written
consent to such payment or settlement offer, such consent not to be unreasonably
withheld or delayed.

 

2.10 Amendment

 

Without limiting the provisions of the Plan of Arrangement, the Plan of
Arrangement may, at any time and from time to time before and after the holding
of the Special Meeting, but

 

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not later than the Effective Time, be amended, updated, revised or supplemented
by mutual written agreement of the Parties hereto. Notwithstanding the
foregoing, no amendment, revision, update or supplement shall be made to the
Plan of Arrangement that (i) would require the Company to obtain any regulatory
approval or the approval of Certicom Shareholders in respect of such amendment,
revision, update or supplement other than at the Special Meeting, (ii) would
prejudice in any material respect the Company’s securityholders or would result
in the withdrawal or material modification of the Fairness Opinion, (iii) would
impede or materially delay the consummation of the transactions contemplated by
the Plan of Arrangement, or (iv) would require the Company to take any action in
contravention of any applicable Law, the Charter Documents of the Company or any
material provision of any material agreement to which it is a party.

 

2.11 List of Shareholders

 

At the reasonable request of the Acquiror from time to time, the Company shall
provide the Acquiror with a list (in both written and electronic form) of the
registered Certicom Shareholders, together with their addresses and respective
holdings of Certicom Shares, with a list of the names and addresses and holdings
of all persons having rights issued by the Company to acquire Certicom Shares
(including Optionholders) and a list of non-objecting beneficial owners of
Certicom Shares, together with their addresses and respective holdings of
Certicom Shares. The Company shall from time to time require that its registrar
and transfer agent furnish the Acquiror with such additional information,
including updated or additional lists of Certicom Shareholders and lists of
holdings and other assistance as the Acquiror may reasonably request.

 

2.12 Shareholder Communications

 

Certicom and the Acquiror agree to co-operate in the preparation of
presentations, if any, to investors regarding the Arrangement, and no Party
shall issue any press release or otherwise make public statements with respect
to this Arrangement Agreement or the Arrangement without the consent of the
other Party and Certicom shall not make any filing with any Governmental Entity
or with the TSX with respect thereto without the consent of the Acquiror and the
Acquiror shall not make any filing with any Governmental Entity or with the TSX
without advising Certicom prior thereto; provided, however, that the foregoing
shall be subject to each Party’s overriding obligation to make any disclosure or
filing required under applicable Laws, and the Party making such disclosure
shall use all commercially reasonable efforts to give prior oral or written
notice to the other Party and reasonable opportunity to review or comment on the
disclosure or filing, and if such prior notice is not possible, to give such
notice immediately following the making of such disclosure or filing.

 

2.13 Withholding

 

Notwithstanding anything in this Arrangement Agreement or the Plan of
Arrangement to the contrary, the Company, the Depository, the Acquiror or one or
more Subsidiaries of the Acquiror, as the case may be, shall be entitled to
deduct and withhold from any amount otherwise payable pursuant to this
Arrangement Agreement or the Plan of Arrangement to any Certicom Shareholder or
Optionholder such amounts as are required to be deducted and withheld with
respect to the making of such payment under the Tax Act, the United States
Internal

 

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Revenue Code of 1986, or any provision of local, state, provincial or foreign
tax Law, in each case, as amended, or the administrative practice of the
relevant Governmental Entity administering such Law. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes of this
Arrangement Agreement and the Plan of Arrangement as having been paid to the
former holder of the Certicom Shares or Certicom Options, as the case may be, in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority
within the time required and in accordance with applicable Laws.

 

2.14 Closing

 

On the Closing Date, the Articles of Arrangement shall be filed with the
Director. From and after the Effective Time, the Plan of Arrangement will have
all of the effects provided by applicable Laws, including the CBCA. The closing
will take place at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street,
Commerce Court West, 23rd Floor, Toronto, Ontario M5L 1A9 at 9:00 a.m. (Toronto
time) on the Closing Date.

 

2.15 Timing Adjustment

 

(1) In the event that prior to the mailing of the Proxy Circular an Acquisition
Proposal is made or announced in respect of which the Board has delivered a
notice pursuant to and in compliance with Section 7.2(1)(c) to the effect that
they have determined such Acquisition Proposal to be a Superior Proposal, then
each of the Mailing Deadline and the Meeting Deadline shall each be extended by
six Business Days.

 

(2) In the event that prior to the mailing of the Proxy Circular an Acquisition
Proposal is made or announced in respect of which the Board has executed a
non-disclosure and standstill agreement pursuant to and in compliance with
Section 7.1(4), then the Mailing Deadline and the Meeting Deadline shall each be
extended by ten calendar days.

 

2.16 Alternative Transaction Structure.

 

  (1) At the request of the Acquiror, the Company shall use commercially
reasonable efforts to assist the Acquiror to successfully implement and complete
any alternative transaction structure that would result in the Acquiror
acquiring, directly or indirectly, all of the Certicom Shares (including, for
greater certainty, an Acquisition Proposal) so long as such an alternative
transaction (a) would provide Certicom Shareholders and Optionholders with a
financial result equivalent to or better than, on an after-tax basis, the
Arrangement and the Company and/or the Board shall, if considered necessary or
desirable, have received a fairness opinion with respect thereto from TD
Securities Inc. or another financial advisor, (b) would not prejudice the
Company’s securityholders, (c) would not impede or materially delay the
consummation of the Arrangement, (d) is otherwise on terms and conditions no
more onerous than the Arrangement and this Arrangement Agreement, (e) would not
require the Company to obtain any regulatory approval and (f) would not require
the Company to take any action in contravention of any applicable Law, the
Charter Documents or any material provision of any material agreement to which
it is a party.

 

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  (2) In the event that following application made in accordance with the terms
of this Arrangement Agreement, the Court declines to grant the Interim Order
substantially in the form of Schedule B, upon request of the Company, the
Acquiror shall make an offer to acquire all of the outstanding Certicom Shares
by way of a take-over bid undertaken in accordance with Securities Laws (the “TO
Bid”), and the Parties shall, subject to Section 2.16(3), not be obliged to
undertake the Arrangement. If the Acquiror is required by the Company to
undertake the TO Bid, the Company shall make commercially reasonable efforts to
obtain from all the directors and officers of the Company lock-up agreements
containing customary provisions in favour of the Acquiror including, without
limitation, agreements by such directors and officers to (i) cancel each
Certicom Option held by the applicable director or officer the exercise price of
which Certicom Option is less than or equal to the Cash Proceeds Per Share (such
Certicom Option, an “Out-of-Money Option”) and (ii) exercise each Certicom
Option (other than Out-of-Money Options) held by the applicable director or
officer and deposit the Certicom Shares issued upon such exercise, together with
any other Certicom Shares held by such director or officer, to the TO Bid, each
such lock-up agreement to be terminable at the option of the director and
officer, as applicable, in the event of termination of the agreement between the
Parties referred to in Section 2.16(3).

 

  (3) In the event that the transaction structure is modified in accordance with
Section 2.16(1) or (2), the relevant provisions of this Arrangement Agreement
shall be modified as necessary in order that they shall apply with full force
and effect, mutatis mutandis, but with the adjustments necessary to reflect the
revised transaction structure, and the Parties hereto shall execute and deliver
an agreement in writing giving effect to and evidencing such amendments as may
be reasonably required as a result of such modifications and adjustments.

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of Certicom

 

Except as set forth in the letter (with specific reference to the Section of
this Arrangement Agreement to which the information stated in such disclosure
relates; provided that information contained in any section of the Disclosure
Letter shall be deemed to be disclosed with respect to any other Section of this
Arrangement Agreement to the extent that it is readily apparent from the face of
such disclosure that such information is applicable to such other Section of
this Arrangement Agreement) delivered by Certicom to the Acquiror prior to the
execution of this Arrangement Agreement (the “Disclosure Letter”) or except as
contemplated by this Arrangement Agreement, Certicom represents and warrants to
the Acquiror as follows:

 

  (a) Organization, Standing and Corporate Power. Except as set forth in
Section 3.1(a) of the Disclosure Letter, each of Certicom and its Subsidiaries,
(i) is a corporation or other legal entity duly organized, validly existing and
in good standing under the Laws of the jurisdiction of its organization (except,
in the case of good standing, for entities organized under the Laws of any
jurisdiction that does not recognize such concept), (ii) has all requisite
corporate or company power and authority to carry on its business as now being
conducted and (iii) is duly qualified or licensed to do business and is in good
standing in each jurisdiction (except, in the case of good standing, any
jurisdiction that does not recognize such concept) in which the nature of its
business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary or desirable, other than where the failure
to be so organized, existing, qualified or licensed or in good standing,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect. Certicom has made available to the Acquiror complete and correct
copies of Certicom’s Charter Documents and the Charter Documents of each of its
Subsidiaries, in each case as amended to the date of this Arrangement Agreement.
Certicom has made available to the Acquiror complete and correct copies of the
minutes (or, in the case of draft minutes, the most recent drafts thereof) of
all meetings of the shareholders, the Board and each committee of the Board and
each of its Subsidiaries held since January 1, 2005, excluding any minutes of
the Special Committee of the Board formed on December 3, 2008 (the “Special
Committee”).

 

  (b) Subsidiaries. Section 3.1(b) of the Disclosure Letter sets forth a
complete and correct list of each Subsidiary of Certicom, its place and form of
organization. All the outstanding shares in the capital of, or other equity or
voting interests in, each such Subsidiary are owned, directly or indirectly, by
Certicom free and clear of any Liens, except for Liens for taxes not yet due and
payable that are payable without penalty or that are being contested in good
faith and for which adequate reserves have been recorded and transfer
restrictions imposed by applicable Securities Laws, and are duly authorized,
validly issued, fully paid and nonassessable. Except for the shares in the
capital of, or other equity or voting interests in, its Subsidiaries, Certicom
does not own, directly or indirectly, any shares in the capital of, or other
equity or voting interests in, any person. Each Subsidiary of Certicom set forth
in Section 3.1(a) of the Disclosure Letter is dormant and has no assets or
liabilities.

 

  (c) Capital Structure.

 

  (i)

The authorized share capital of Certicom consists of an unlimited number of
Certicom Shares and an unlimited number of preference shares. As of January 21,
2009, there were 43,728,790 Certicom Shares and no preference shares issued and

 

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outstanding. In addition, as of January 21, 2009, there were Certicom Options to
acquire 7,461,182 Certicom Shares outstanding under the Certicom Stock Option
Plans. As of the date hereof, other than the Certicom Shares, there are
outstanding no other shares of any class or series in the capital of Certicom.
Other than the Certicom Stock Option Plans, there are no plans or other
Contracts providing for the grant of options exercisable for or into Certicom
Shares by Certicom or any of its Subsidiaries. No Certicom Shares are owned by
any Subsidiary of Certicom. Section 3.1(c)(i) of the Disclosure Letter sets out
a complete and correct list of all outstanding Certicom Options, the number of
Certicom Shares subject to such Certicom Options, the grant date, exercise
price, vesting schedule and expiration date of each such Certicom Option and the
name of the holder thereof and an indication of whether or not each such holder
is a current employee of Certicom or any of its Subsidiaries.

 

  (ii) Except as set forth in Section 3.1(c)(i) and in Section 3.1(c)(ii) of the
Disclosure Letter, as of the date of this Arrangement Agreement, no shares in
the capital of, or other equity or voting interests in, Certicom, or options,
warrants, share units, restricted stock awards, stock appreciation rights,
phantom stock awards or other rights to acquire any such stock or securities, or
other rights that are linked to the value of the Certicom Shares or the value of
Certicom or any part thereof, were issued, reserved for issuance or outstanding.

 

  (iii)

All outstanding Certicom Shares are, and all Certicom Shares that may be issued
pursuant to the Certicom Stock Option Plans will be, when issued in accordance
with the terms thereof, duly authorized, validly issued, fully paid and
non-assessable and not subject to pre-emptive rights. There are no (A) bonds,
debentures, notes or other indebtedness of Certicom or any of its Subsidiaries
and (B) except as set forth in Section 3.1(c)(i) and pursuant to the Certicom
Stock Option Plans and the Shareholder Rights Plan, there are no securities or
other instruments or obligations of Certicom or any of its Subsidiaries, in each
case, the value of which is based upon or derived from any shares in the capital
of, or other equity or voting interests in, Certicom or which has or which by
its terms may have at any time (whether actual or contingent) the right to vote
(or which is convertible into, or exchangeable for, securities having the right
to vote) on any matters on which shareholders of Certicom or any of its
Subsidiaries may vote. Except as set forth in Section 3.1(c)(i), there are no
securities, options, warrants, calls, rights or Contracts of any kind to which
Certicom or any of its Subsidiaries is a party, or by which Certicom or any of
its

 

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Subsidiaries is bound, obligating Certicom or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares in
the capital of, or other equity or voting interests in, or securities
convertible into, or exchangeable or exercisable for, shares in the capital of,
or other equity or voting interests in, Certicom or any of its Subsidiaries or
obligating Certicom or any of its Subsidiaries to issue, grant, extend or enter
into any such security, option, warrant, call, right or Contract. With respect
to the Certicom Options, (1) each grant of a Certicom Option was duly authorized
no later than the date on which the grant of such Certicom Option was by its
terms to be effective (the “Grant Date”) by all necessary corporate action,
including, as applicable, approval by the Board (or a duly constituted and
authorized committee thereof) and any required shareholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto,
(2) each such grant was made in accordance with the Certicom Stock Option Plans
and all applicable Laws and regulatory rules or requirements, including the
rules of the TSX, (3) the per share exercise price of each Certicom Option was
not less than the fair market value of a Certicom Share on the applicable Grant
Date and (4) each such grant was properly accounted for in all material respects
in accordance with GAAP in the financial statements (including the related
notes) of Certicom and disclosed in accordance with applicable Securities Laws.
There are no outstanding contractual or other obligations of Certicom or any of
its Subsidiaries to (I) repurchase, redeem or otherwise acquire any shares in
the capital of, or other equity or voting interests in, Certicom or any of its
Subsidiaries or (II) vote or dispose of any shares in the capital of, or other
equity or voting interests in, Certicom or any of its Subsidiaries. Certicom is
not a party to any voting agreements with respect to any shares in the capital
of or other equity or voting interests in Certicom or any of its Subsidiaries
and, to the knowledge of Certicom, as of the date of this Arrangement Agreement,
other than any support agreements executed and delivered contemporaneously with
this Arrangement Agreement, there are no irrevocable proxies and no voting
agreements with respect to any shares in the capital of, or other equity or
voting interests in, Certicom or any of its Subsidiaries.

 

  (iv) All outstanding Certicom Options are evidenced by individual written
certificates and or agreements, substantially identical to the forms set forth
in Section 3.1(c)(iv) of the Disclosure Letter. No stock option agreement
contains terms that are materially inconsistent with, or, except as set forth in
Section 3.1(c)(iv) of the Disclosure Letter, in addition to, the terms contained
in the Certicom Stock Option Plans.

 

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  (v) Section 3.1(c)(v) of the Disclosure Letter sets forth (i) the name of each
Optionholder of unvested Certicom Options that will be entitled to any
acceleration of the vesting of such unvested Certicom Options as a result of the
transactions contemplated by this Arrangement Agreement, (ii) with respect to
each such Optionholder, the number of Certicom Shares subject to such unvested
Certicom Options that will be subject to such acceleration and (iii) with
respect to each such Optionholder, the Contracts pursuant to which such
Optionholder is entitled to such acceleration, if any.

 

  (vi) Section 3.1(c)(vi) of the Disclosure Letter sets forth, as of the date
hereof, all outstanding Financial Indebtedness of Certicom and its Subsidiaries.
All the outstanding Financial Indebtedness of Certicom or any of its
Subsidiaries is prepayable without prepayment penalty or premium, and no
Financial Indebtedness of Certicom or any of its Subsidiaries contains any
restriction upon the incurrence of Financial Indebtedness by Certicom or any of
its Subsidiaries or restricts the ability of Certicom or any of its Subsidiaries
to grant any Liens on its properties or assets.

 

  (vii) There are no outstanding Guarantees (or any similar instruments or
Contracts) of Financial Indebtedness by Certicom or any of its Subsidiaries.

 

  (d)

Authority; Noncontravention. Certicom has the requisite corporate power and
authority to execute and deliver this Arrangement Agreement, to complete the
Arrangement and the other transactions contemplated by this Arrangement
Agreement, subject, in the case of completion of the Arrangement, to obtaining
Shareholder Approval, and to comply with the provisions of this Arrangement
Agreement. The execution and delivery of this Arrangement Agreement by Certicom,
the completion of the Arrangement and the other transactions contemplated by
this Arrangement Agreement and the compliance by Certicom with the provisions of
this Arrangement Agreement have been duly authorized by all necessary corporate
action on the part of Certicom, and no other corporate proceedings on the part
of Certicom are necessary to authorize this Arrangement Agreement, to comply
with the terms of this Arrangement Agreement or to complete the Arrangement and
the other transactions contemplated by this Arrangement Agreement, subject, in
the case of completion of the Arrangement, to obtaining Shareholder Approval.
This Arrangement Agreement has been duly executed and delivered by Certicom and,
assuming the due execution and delivery of this Arrangement Agreement by the
Acquiror, constitutes a valid and binding

 

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obligation of Certicom, enforceable against Certicom in accordance with its
terms, except that such enforceability may be (i) limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar
laws of general application affecting or relating to the enforcement of
creditors’ rights generally and (ii) subject to general principles of equity,
whether considered in a proceeding at law or in equity (the “Bankruptcy and
Equity Exception”). The Special Committee has duly and unanimously (i) concluded
that it is in the best interests of Certicom to enter into this Arrangement
Agreement and complete the Arrangement and the other transactions contemplated
by this Arrangement Agreement on the terms and subject to the conditions set
forth in this Arrangement Agreement, (ii) concluded that the Arrangement is fair
to the Certicom Shareholders, and (iii) recommended to the Board that the Board
approve and declare advisable this Arrangement Agreement, the Arrangement and
the other transactions contemplated by this Arrangement Agreement and recommend
the Arrangement to Certicom Shareholders. The Board, at a meeting duly called
and held at which all of the directors of Certicom were present, duly and
unanimously adopted (i) resolutions approving this Arrangement Agreement, the
Arrangement and the other transactions contemplated by this Arrangement
Agreement, (ii) resolutions declaring that it is in the best interests of
Certicom for Certicom to enter into this Arrangement Agreement and complete the
Arrangement and the other transactions contemplated by this Arrangement
Agreement on the terms and subject to the conditions set forth in this
Arrangement Agreement and to file and deliver to Certicom Shareholders and
Optionholders the Proxy Circular recommending the Arrangement, (iii) a statement
that each director of Certicom who is a Certicom Shareholder intends to vote in
favour of the Arrangement Resolution, and (iv) a recommendation that the
Certicom Shareholders vote in favour of the Arrangement Resolution, which
resolutions, in each case, have not been rescinded, modified or withdrawn in any
way. The execution and delivery of this Arrangement Agreement, the completion of
the Arrangement and the other transactions contemplated by this Arrangement
Agreement and compliance by Certicom with the provisions of this Arrangement
Agreement do not and will not conflict with, or result in any violation or
breach of, or default (with or without notice or lapse of time or both) under,
or give rise to a right of, or result in, termination, cancellation or
acceleration of any obligation or to a loss of a benefit under, or require any
consent or other action by any person under, or result in the creation of any
Lien in or upon any of the properties or assets of Certicom or any of its
Subsidiaries under, or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under (including any right of a holder of a
security of Certicom or any of its Subsidiaries to require Certicom or any of
its Subsidiaries to acquire such security), any provision of (A) the Charter
Documents of Certicom or similar organizational documents of any of its
Subsidiaries, (B) any material Contract or Permit to which Certicom or

 

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any of its Subsidiaries is a party or bound by or any of their respective
properties or assets are bound by or subject to or otherwise under which
Certicom or any of its Subsidiaries has rights or benefits or (C) subject to the
governmental filings and other matters referred to in the following sentence,
any (1) Laws or (2) federal, provincial or local, domestic or foreign, judgment,
injunction, order, writ or decree of any Governmental Entity (each, a
“Judgment”), in each case, applicable to Certicom or any of its Subsidiaries or
their respective properties or assets, other than, in the case of clauses
(B) and (C), any such conflicts, violations, breaches, defaults, rights,
terminations, cancellations, accelerations, consents, losses, Liens, rights or
entitlements that, individually or in the aggregate, have not had and would not
reasonably be likely to (x) result in a Material Adverse Effect (or affect the
Acquiror in a material and adverse manner), (y) prevent, materially impede or
materially delay the consummation by Certicom of the Arrangement or the other
transactions contemplated hereby or (z) result in an impairment in any material
respect of the ability of Certicom to perform its obligations under this
Arrangement Agreement. No consent, approval, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity,
is required by Certicom or any of its Subsidiaries in connection with the
execution and delivery of this Arrangement Agreement by Certicom, the completion
of the Arrangement or any of the other transactions contemplated by this
Arrangement Agreement or the compliance by Certicom with the provisions of this
Arrangement Agreement, except for (I) the Shareholder Approval, Interim Order
and Final Order, (II) the consents, approvals, orders, authorizations,
registrations, declarations, filings and notices set forth in Section 3.1(d)(A)
of the Disclosure Letter, (III) the filing with the CSA of this Arrangement
Agreement, a material change report, the Proxy Circular and such other documents
and reports under the Securities Laws and the rules and regulations promulgated
thereunder, as may be required in connection with this Arrangement Agreement and
the transactions contemplated by this Arrangement Agreement, (IV) any filings
with the Director under the CBCA, (V) any filings required under the rules of
the TSX and (VI) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices the failure of which to be
obtained or made, individually or in the aggregate, have not had and would not
be reasonably likely to (x) result in a Material Adverse Effect, (y) prevent,
materially impede or materially delay the completion by Certicom of the
Arrangement or the other transactions contemplated hereby or (z) result in an
impairment in any material respect of the ability of Certicom to perform its
obligations under this Arrangement Agreement. Following the consummation of the
Arrangement in accordance with its terms, the Acquiror will not have any
obligation to make any payment to any person with respect to the purchase of any
Certicom Shares or any Certicom Options, except as contemplated in the Plan of
Arrangement.

 

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  (e) CSA Documents.

 

  (i) Certicom is a “reporting issuer” under Securities Laws and is not in
default of any material requirements under Securities Laws. No delisting,
suspension of trading or cease trading order with respect to the Certicom Shares
is pending or, to the knowledge of Certicom, threatened. To the knowledge of
Certicom, no inquiry, review or investigation (formal or informal) of any
securities regulatory authority under applicable Securities Laws or the TSX is
in effect or ongoing or expected to be implemented or undertaken.

 

  (ii)

Certicom has made available to the Acquiror, or the System for Electronic Data,
Analysis and Retrieval (SEDAR) database contains in a publicly available format,
complete and correct copies of all reports, schedules, forms, statements and
other documents filed with or furnished to the CSA by Certicom since May 1, 2007
(together with all exhibits and schedules thereto and documents and other
information incorporated therein by reference, the “CSA Documents”). Certicom
has filed with or furnished to the CSA each report, schedule, form, statement or
other document or filing required by Law to be filed or furnished since May 1,
2007. No Subsidiary of Certicom is required to file or furnish any material
report, schedule, form, statement or other document with, or make any other
filing with, or furnish any other material to, the CSA. As of their respective
dates, each of the CSA Documents complied as to form in all material respects
with the requirements of Securities Laws applicable to such CSA Document, and
none of the CSA Documents at the time it was filed or furnished contained any
Misrepresentation. Except to the extent that information contained in any CSA
Document filed or furnished and publicly available prior to the date of this
Arrangement Agreement (a “Filed CSA Document”) has been revised or superseded by
a later filed or furnished Filed CSA Document, none of the CSA Documents
contains any Misrepresentation. Certicom has not received any comment letter
from the CSA relating to the CSA Documents. As of the date of this Arrangement
Agreement, to the knowledge of Certicom, none of the CSA Documents is the
subject of any ongoing review by the CSA. The comparative financial statements
(including the related notes) of Certicom included in the CSA Documents
complied, at the time the respective statements were filed, as to form in all
material respects with the applicable accounting requirements and the rules of
the CSA with respect thereto, have been prepared in accordance with generally
accepted accounting principles in effect from time to time in Canada (“GAAP”)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of Certicom

 

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and its consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited quarterly financial statements, to normal and recurring
year-end audit adjustments and provided that such unaudited interim financial
statements may omit notes that are not required in the unaudited financial
statements). Except (A) as set forth in the most recent balance sheet (including
the notes thereto) included in the Filed CSA Documents (the “Baseline
Financials”), (B) for liabilities incurred after the date of the Baseline
Financials in the ordinary course of business consistent with past practice and
similar in character and amount to the liabilities and obligations set forth in
the Baseline Financials, and (C) liabilities in respect of fees and expenses
incurred by Certicom in connection with the Arrangement and the other
transactions contemplated by this Arrangement Agreement, Certicom and its
Subsidiaries have no liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise). Certicom has not filed any confidential
material change report or similar disclosure document with any securities
regulatory authority or stock exchange that remains confidential as of the date
of this Arrangement Agreement.

 

  (iii) The chief executive officer of Certicom and the chief financial officer
of Certicom each has made all certifications required by National Instrument
52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, as
applicable, with respect to the CSA Documents, and the statements contained in
such certifications were accurate as of the date they were made.

 

  (iv) Neither Certicom nor any of its Subsidiaries is a party to, or has any
commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar Contract (including any Contract relating to any
transaction or relationship between or among Certicom and any of its
Subsidiaries, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose entity or person, on the
other hand), where the result, purpose or effect of such Contract is to avoid
disclosure of any transaction involving, or liabilities of, Certicom or any of
its Subsidiaries in Certicom’s or any of its Subsidiaries published financial
statements or other CSA Documents.

 

  (f) Absence of Certain Changes or Events.

 

  (i)

Since April 30, 2008 to the date of this Arrangement Agreement, Certicom and its
Subsidiaries have conducted their respective businesses only in the ordinary
course consistent with past

 

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practice and, except as disclosed in Section 3.1(f)(i) of the Disclosure Letter,
there has not been (A) any Material Adverse Effect, (B) any declaration, setting
aside or payment of any dividend on, or other distribution (whether in cash,
stock or property) in respect of, any shares in the capital of, or equity or
other voting interests in, Certicom or any of its Subsidiaries, except for
dividends by a direct or indirect wholly-owned Subsidiary of Certicom to its
parent, (C) any split, combination or reclassification of any shares in the
capital of, or equity or other voting interests in, Certicom or any of its
Subsidiaries or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares in the
capital of, or other equity or voting interests in, Certicom or any of its
Subsidiaries, (D) except for the Executive Retention Agreements, any grant by
Certicom or any of its Subsidiaries to any current or former director, officer,
employee, individual contractor or individual consultant of Certicom or any of
its Subsidiaries (collectively, “Certicom Personnel”) of any bonus opportunity,
any loan or any increase in any type of compensation or benefits, (E) any
payment by Certicom or any of its Subsidiaries to any Certicom Personnel of any
bonus, (F) except for the Executive Retention Agreements, any grant by Certicom
or any of its Subsidiaries to any current director or officer of Certicom or any
of its Subsidiaries of any severance, change in control, termination or similar
compensation or benefits or increases therein or of the right to receive any
severance, change in control, termination or similar compensation or benefits or
increases therein or any grant by Certicom or any of its Subsidiaries to any
other Certicom Personnel of any severance, change in control, termination or
similar compensation or benefits or increases therein or of the right to receive
any severance, change in control, termination or similar compensation or
benefits or increases therein, (G) any adoption of or entry by Certicom or any
of its Subsidiaries into, any amendment of or modification to or agreement to
amend or modify, or any termination of, (1) any employment, deferred
compensation, change in control, severance, termination, loan, indemnification,
retention, stock repurchase, or similar Contract between Certicom or any of its
Subsidiaries, on the one hand, and any Certicom Personnel, on the other hand,
(2) any consulting agreement between Certicom or any of its Subsidiaries, on the
one hand, and any current or former officer or director of Certicom or any of
its Subsidiaries, on the other hand, (3) any consulting agreement between
Certicom or any of its Subsidiaries, on the one hand, and any other Certicom
Personnel, on the other hand, (4) any Contract between Certicom or any of

 

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its Subsidiaries, on the one hand, and any Certicom Personnel, on the other
hand, the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving Certicom of the nature
contemplated by this Arrangement Agreement or (5) any trust or insurance
Contract or other agreement to fund or otherwise secure payment of any
compensation or benefit to be provided to any Certicom Personnel (all such
Contracts under this clause (G), including any such Contract which is entered
into any time prior to or on or after the date of this Arrangement Agreement,
collectively, “Benefit Agreements”), (H) any grant or amendment of any incentive
award (including stock options, stock appreciation rights, performance units,
restricted stock, restricted stock units, stock repurchase rights or other
stock-based or stock-related awards) or the removal or modification of any
restrictions in any such award (including the acceleration thereof), (I) any
change in financial or tax accounting methods, principles or practices by
Certicom or any of its Subsidiaries, except insofar as may have been required by
GAAP or applicable Laws, (J) any tax election or change in any tax election or
any settlement or compromise of any income tax liability, (K) any write-down by
Certicom or any of its Subsidiaries of any of the assets of Certicom or any of
its Subsidiaries, or (L) any licensing or other agreement with regard to the
acquisition or disposition of any Intellectual Property or rights thereto, other
than nonexclusive licenses granted in the ordinary course of the business of
Certicom and its Subsidiaries consistent with past practice.

 

  (ii) Since April 30, 2008, each of Certicom and its Subsidiaries has continued
all pricing, sales, receivables and payables practices in accordance with the
ordinary course of business consistent with past practice and has not engaged,
except in the ordinary course of business consistent with past practice, in
(A) any trade loading practices or other promotional sales or discount activity
with any customers or distributors with the effect of accelerating to prior
fiscal quarters (including the current fiscal quarter) sales to the trade or
otherwise that would otherwise be expected to occur in subsequent fiscal
quarters, (B) any practice that would have the effect of accelerating to prior
fiscal quarters (including the current fiscal quarter) collections of
receivables that would otherwise be expected to be made in subsequent fiscal
quarters, (C) any practice that would have the effect of postponing to
subsequent fiscal quarters payments by Certicom or any of its Subsidiaries that
would otherwise be expected to be made in prior fiscal quarters (including the
current fiscal quarter) or (D) any other promotional sales or discount activity.

 

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  (g) Litigation. Section 3.1(g) of the Disclosure Letter sets forth, as of the
date of this Arrangement Agreement, a complete and correct list of each claim
(other than immaterial claims), action, suit, arbitration, judicial,
administrative and regulatory proceeding or investigations pending or, to the
knowledge of Certicom, threatened by or against Certicom or any of its
Subsidiaries (i) for money damages, (ii) that seeks injunctive relief,
(iii) that may give rise to any legal restraint on or prohibition against or
limit the material benefits to the Acquiror of the transactions contemplated by
this Arrangement Agreement or (iv) that, if resolved in accordance with
plaintiff’s demands, is reasonably likely to have a Material Adverse Effect.
Except as set forth in Section 3.1(g), Section 3.1(m)(ii) or Section 3.1(m)(xii)
of the Disclosure Letter, there is no Judgment of any Governmental Entity or
arbitrator outstanding against, or, to the knowledge of Certicom, investigation,
proceeding, notice of violation, order of forfeiture or complaint by any
Governmental Entity involving, Certicom or any of its Subsidiaries. Neither
Certicom nor any of its Subsidiaries has commenced any Litigation (other than
any Litigation, on an individual basis, that is comprised solely of monetary
claims of less than $50,000, immaterial internal investigations, actions for
non-payment in the ordinary course of business consistent with past practice
that have been settled, and the mere transmittal of ordinary course trade-mark
cease and desist letters) since April 30, 2008.

 

  (h) Contracts. Section 3.1(h) of the Disclosure Letter sets forth a complete
and correct list as of the date of this Arrangement Agreement of Contracts
except for non-disclosure and standstill agreements entered into with parties in
connection with a possible Acquisition Proposal prior to the date hereof or in
accordance with the terms of this Arrangement Agreement:

 

  (A) each Contract pursuant to which Certicom or any of its Subsidiaries has,
in any material respect, agreed not to compete with any person in any area or to
engage in any activity or business, or pursuant to which any benefit or right is
required to be given or lost in any material respect as a result of so competing
or engaging;

 

  (B)

each Contract to which Certicom or any of its Subsidiaries is a party providing
for exclusivity or any similar requirement or pursuant to which Certicom or any
of its Subsidiaries is restricted in any material respect, or which after the
Effective Time could restrict the Acquiror or any of its Subsidiaries in any
way, with respect to the development, manufacture, marketing or distribution of
their respective products or services or otherwise prohibits any activity in
respect of the operation of their businesses, or pursuant to which any benefit
or right is required to be given or lost as a result of non-compliance

 

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with any such exclusive or prohibiting requirements, or which requires Certicom
or any of its Subsidiaries to refrain from granting license or franchise rights
to any other person;

 

  (C) each Contract by and between Certicom or any of its Subsidiaries and
(1) any affiliate or related party of Certicom or any of its Subsidiaries,
(2) any Certicom Personnel, (3) any union or other labour organization or
(4) any person known by Certicom to be an affiliate of any such person, other
than, in each case, (I) offer letters or employment agreements or consulting
agreements that are (i) entered into by Certicom or any of its Subsidiaries in
the ordinary course of business, do not deviate substantially or materially from
Certicom or such Subsidiary’s standard form agreement and are not with a
director or officer of Certicom or any of its Subsidiaries or (ii) terminable in
accordance with applicable Law by Certicom or any of its Subsidiaries both
without any contractual penalty and without any contractual obligation of
Certicom or any of its Subsidiaries to pay severance or other compensation or
benefits (other than accrued base salary, accrued commissions, accrued bonuses,
accrued vacation pay, accrued floating holidays and legally mandated benefits or
amounts) and are not with a director or officer of Certicom or any of its
Subsidiaries, (II) invention assignment and confidentiality agreements relating
to the assignment of inventions to Certicom or any of its Subsidiaries not
involving the payment of money and (III) Benefit Plans and Benefit Agreements;

 

  (D) except as disclosed in Section 3.1(c)(vi) of the Disclosure Letter and
other than liabilities in respect of fees and expenses incurred by Certicom in
connection with the Arrangement and the other transactions contemplated by this
Arrangement Agreement, each Contract under which Certicom or any of its
Subsidiaries has any outstanding indebtedness having an aggregate principal
amount in excess of $100,000;

 

  (E)

each Contract to which Certicom or any of its Subsidiaries is a party creating
or granting a Lien (including Liens upon properties or assets acquired under
conditional sales, capital leases or other title retention or security devices),
other than (1) immaterial Liens for taxes not yet due and payable, that are
payable without penalty or that are being contested in good faith and for

 

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which adequate reserves have been recorded, (2) immaterial Liens for assessments
and other governmental charges or landlords’, carriers’, warehousemen’s,
mechanics’, repairmen’s, workers’ or similar Liens, incurred in the ordinary
course of business, consistent with past practice, in each case for sums not yet
due and payable or due but not delinquent or being contested in good faith by
appropriate proceedings, (3) immaterial Liens incurred in the ordinary course of
business, consistent with past practice, in connection with workers’
compensation, unemployment insurance, Canada Pension Plan and other types of
social security or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return of money bonds and similar obligations, (4) title of a lessor under a
capital or operating lease and (5) Liens that are not reasonably likely to
adversely interfere in a material way with the use of properties or assets
encumbered thereby (collectively, “Permitted Liens”);

 

  (F)

each Customer Contract material to Certicom and its Subsidiaries on a
consolidated basis to which Certicom or any of its Subsidiaries is a party
(1) containing any “change in control” or similar provisions with respect to
Certicom or any of its Subsidiaries, including provisions requiring consent or
approval of, or notice to, any Governmental Entity or other person in the event
of, or with respect to, completion of the Arrangement or any of the other
transactions contemplated by this Arrangement Agreement or the execution,
delivery or effectiveness of this Arrangement Agreement will conflict with,
result in a violation or breach of, or constitute a default (with or without
notice or lapse of time or both) under, such Customer Contract, or give rise
under such Customer Contract to any right of, or result in, a termination, right
of first refusal, amendment, revocation, cancellation or acceleration of any
obligation, or a loss of a benefit or the creation of any Lien upon any of the
properties or assets of Certicom, the Acquiror or any of their respective
Subsidiaries, or to any increased, guaranteed, accelerated or additional rights
or entitlements of any person, (2) in the case of a Customer Contract,
prohibiting or imposing any material restrictions on the assignment of all or
any portion of such Customer Contract by Certicom or its Subsidiaries (without
regard to any exception permitting assignments to Subsidiaries or affiliates) or
(3) containing

 

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any provisions having the effect of providing that the completion of the
Arrangement or any of the other transactions contemplated by this Arrangement
Agreement or the execution, delivery or effectiveness of this Arrangement
Agreement will require that a third party be provided with access to source code
or that any source code be released from escrow and provided to any third party;

 

  (G) each Contract to which Certicom or any of its Subsidiaries is a party
providing for material payments of royalties or other license fees to third
parties, other than payments of licence fees to third parties for commercially
available off-the-shelf Third Party Software;

 

  (H) each Customer Contract to which Certicom or any of its Subsidiaries is a
party granting a third party any license to Intellectual Property, other than
any contract entered into in the ordinary course of business of Certicom and its
Subsidiaries consistent with past practice;

 

  (I) each Contract pursuant to which Certicom or any of its Subsidiaries has
been granted any license to Intellectual Property, other than non-exclusive
licenses granted in the ordinary course of business of Certicom and its
Subsidiaries consistent with past practice;

 

  (J) each Customer Contract to which Certicom or any of its Subsidiaries is a
party granting the other party to such Contract or a third party “most favoured
nation” pricing or terms that (1) applies to Certicom or any of its Subsidiaries
or (2) following the Effective Date, would apply to the Acquiror or any
Subsidiary of the Acquiror;

 

  (K) each Contract that guarantees or warrants that any of the products or
services of Certicom or any of its Subsidiaries are fit for any particular
purposes or that guarantees a result or commits to performance levels, other
than any Contract entered into in the ordinary course of business of Certicom
and its Subsidiaries consistent with past practice or for warranties granted
pursuant to applicable Law;

 

  (L) each Contract pursuant to which Certicom or any of its Subsidiaries has
agreed or is required to provide any third party with products in source code
form, or to provide for source code to be put in escrow, in each case excluding
non-material pieces of source code developed for customers by Certicom which are
not integral to Certicom’s products or services;

 

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  (M) each Contract containing any non-solicitation or similar provision that
restricts Certicom or any of its Subsidiaries except for Contracts with
customers of Certicom or any of its Subsidiaries entered into in the ordinary
course of business consistent with past practice containing covenants not to
solicit the employees of such customers who have been involved with the
provision of services by Certicom or its Subsidiaries to such customers;

 

  (N) each Contract to which Certicom or any of its Subsidiaries is a party for
any joint venture (whether in partnership, limited liability company or other
organizational form) or material alliance or similar arrangement (excluding any
membership in a standards setting organization);

 

  (O) each Contract to which Certicom or any of its Subsidiaries is a party for
any material development, marketing, resale, distribution or similar arrangement
relating to any product or service other than any Contract entered into in the
ordinary course of business, consistent with past practice;

 

  (P) each Contract to which Certicom or any of its Subsidiaries is a party with
any Governmental Entity involving aggregate amounts paid or payable to Certicom
under such Contract in excess of $250,000 since May 1, 2006;

 

  (Q) each Contract to which Certicom or any of its Subsidiaries is a party
entered into in the last five years in connection with the settlement or other
resolution of any Litigation that has any material continuing obligations,
liabilities or restrictions;

 

  (R) each Contract to which Certicom or any of its Subsidiaries is a party
providing for future performance by Certicom or any of its Subsidiaries in
consideration of amounts previously paid, excluding maintenance agreements with
customers entered into in the ordinary course of business consistent with past
practice;

 

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  (S) each Contract to which Certicom or any of its Subsidiaries is a party
providing for liquidated damages of a material amount;

 

  (T) each Contract to which Certicom or any of its Subsidiaries is a party for
professional services engagements for a fixed fee that guarantees a specific
result other than any Contract entered into in the ordinary course of business
of Certicom and its Subsidiaries, consistent with past practice;

 

  (U) each Contract between Certicom or any of its Subsidiaries and any of the
20 largest customers of Certicom and its Subsidiaries on a consolidated basis
(determined on the basis of revenues received by Certicom or any of its
Subsidiaries in the 24 month period ended October 31, 2008 (each such customer,
a “Major Customer”, and each such Contract, a “Major Customer Contract”);

 

  (V) each Contract between Certicom or any of its Subsidiaries and any of the
15 largest licensors or other suppliers to Certicom and its Subsidiaries
determined on the basis of amounts paid by Certicom or any of its Subsidiaries
in the 24 month period ended October 31, 2008 in excess of $50,000 (each such
licensor or other supplier, a “Major Supplier”, and each such Contract, a “Major
Supplier Contract”);

 

  (W) each Contract with a customer of Certicom or any of its Subsidiaries or
with any distributor or re-seller of Certicom’s products or services and each
Contract under which Certicom or any of its Subsidiaries is providing any
products or services, in each case not containing a waiver of incidental,
consequential, punitive, indirect or special damages in favour of Certicom or
such Subsidiary in all circumstances; and

 

  (X) except for Contracts otherwise disclosed pursuant to this Section 3.1,
each Contract which has aggregate future sums due to or from Certicom or any of
its Subsidiaries, taken as a whole, (1) during the period commencing on the date
of this Arrangement Agreement and ending on the 12-month anniversary of this
Arrangement Agreement, in excess of $250,000 or (2) during the life of the
Contract, in excess of $500,000.

 

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The Contracts of Certicom or any of its Subsidiaries of the type referred to in
clauses (A) through (X) of subsection (h) above are collectively referred to in
this Arrangement Agreement as “Specified Contracts”. Certicom has made available
to the Acquiror a complete and correct copy of each of the Specified Contracts,
including all amendments thereto, and no Specified Contract has been modified,
rescinded or terminated since the date such Specified Contract was posted to
Certicom Data Rooms. Subject to the Bankruptcy and Equity Exception, each
Specified Contract is in full force and effect (except for those Contracts that
have expired in accordance with their terms) and is a legal, valid and binding
agreement of Certicom or its Subsidiary, as the case may be, and, to the
knowledge of Certicom, of each other party thereto, enforceable against Certicom
or such Subsidiary, as the case may be, and, to the knowledge of Certicom,
against the other party or parties thereto, in each case, in accordance with its
terms. Each of Certicom and its Subsidiaries has performed or is performing all
material obligations required to be performed by it under the Specified
Contracts and is not (with or without notice or lapse of time or both) in breach
or in default in any material respect thereunder, and has not waived or failed
to enforce any material rights or benefits thereunder, and, to the knowledge of
Certicom, no other party to any of the Specified Contracts is (with or without
notice or lapse of time or both) in breach or in default in any material respect
thereunder. To the knowledge of Certicom, there has occurred no event giving
(with or without notice or lapse of time or both) to others any right of
termination, material amendment or cancellation of any Specified Contract. To
the knowledge of Certicom, there are no circumstances that are reasonably likely
to occur that is reasonably likely to adversely affect the ability of Certicom
or any of its Subsidiaries to perform its material obligations under any
Specified Contract.

 

Certicom has disclosed to the Acquiror the terms and status of all negotiations
with respect to any proposed Contract with any Major Customer or Major Supplier
involving aggregate amounts payable under such Contract to or by Certicom or any
of its Subsidiaries in excess of $250,000. As of the date of this Arrangement
Agreement, none of the Major Customers or Major Suppliers has terminated,
notified Certicom of its intention to terminate, or discontinue provision of
services (if applicable), failed to renew or requested any material amendment to
any of its Major Customer Contracts or Major Supplier Contracts, or any of its
existing relationships, with Certicom or any of its Subsidiaries.

 

  (i)

Compliance with Laws. Certicom and its Subsidiaries and their respective
properties, assets, operations and businesses have been and are being operated
and have been and are in compliance in all material respects with all applicable
Laws and Judgments. None of Certicom or any of its Subsidiaries has received a
notice or other communication alleging a possible material violation of any Law
or Judgments applicable to its

 

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properties, assets, businesses or operations. Certicom and its Subsidiaries have
in effect all Permits necessary for them to own, lease or otherwise hold and
operate their respective properties and assets and to carry on their respective
businesses in all material respects as currently conducted, including with
respect to the transfer or export of any Certicom IP, and as currently proposed
to be conducted, and there has occurred no material violation of, or material
default (with or without notice or lapse of time, or both) under, any such
Permit. There has occurred no event which, to the knowledge of Certicom, could
reasonably be expected to result in the revocation, cancellation, non-renewal or
adverse modification of any such Permit and the Arrangement, in and of itself,
and the other transactions contemplated by this Arrangement Agreement could not
reasonably be expected to cause the revocation, cancellation, non-renewal or
adverse modification of any such Permit. There are no past or present events,
conditions, circumstances, activities, practices, incidents, actions or plans
that could reasonably be expected to (i) interfere with or prevent compliance or
continued compliance by Certicom or any of its Subsidiaries with any
import/export Laws governing Certicom’s or any of its Subsidiaries’ present and
currently contemplated future operations or with any Law, Judgment, notice or
demand letter issued, entered, promulgated or approved thereunder, (ii) give
rise to any liability of Certicom or any of its Subsidiaries under any
import/export Law governing Certicom or any of its Subsidiaries’ past, present
and currently contemplated future operations or business or (iii) otherwise form
a valid basis of any Litigation based on or related to import or export of goods
or services, and, to the knowledge of Certicom, no such events, conditions,
circumstances, activities, practices, incidents, actions or plans could
reasonably be expected to arise in the future. None of Certicom’s or, to the
knowledge of Certicom, any of its Subsidiaries or any of their respective
directors, executives, representatives, agents or employees (i) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or
other expenses relating to political activity that would be illegal, (ii) has
used or is using any corporate funds for any direct or indirect illegal payments
to any foreign or domestic governmental officials or employees, (iii) has
violated or is violating any provision of the United States Foreign Corrupt
Practices Act of 1977, (iv) has established or maintained, or is maintaining,
any illegal fund of corporate monies or other properties or (v) has made any
bribe, illegal rebate, illegal payoff, influence payment, kickback or other
illegal payment of any nature.

 

  (j) Absence of Changes in Benefit Plans; Employment Agreements; Labour
Relations.

 

  (i)

Except as disclosed in the Filed CSA Documents, since May 1, 2007 to the date of
this Arrangement Agreement, none of Certicom or any of its Subsidiaries has
adopted, entered into, terminated, amended, modified or agreed to adopt, enter
into,

 

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terminate, amend or modify in any material respect any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock appreciation,
restricted stock, stock repurchase right, stock option (including the Certicom
Stock Option Plans), phantom stock, stock-based compensation, performance,
retirement, savings, paid time off, perquisite, vacation, severance, change in
control, termination, retention, disability, death benefit, hospitalization,
medical or other welfare benefit or other similar plan, program, arrangement or
agreement (whether oral or written, funded or unfunded and whether or not
subject to the laws of Canada or the United States), which is sponsored,
maintained, contributed to or required to be maintained or contributed to by
Certicom or any of its Subsidiaries or with respect to which Certicom is
otherwise jointly or severally liable under applicable Laws (each, a “Commonly
Controlled Entity”), in each case, providing compensation or benefits to any
Certicom Personnel and other persons, but not including the Benefit Agreements
(all such plans, programs, arrangements and agreements, including any such plan,
program, arrangement or agreement entered into or adopted on or after the date
of this Arrangement Agreement, collectively, “Benefit Plans”) and a plan to make
employer contributions of up to $2,000 per year for each individual that is a
Certicom Personnel.

 

  (ii) As of the date of this Arrangement Agreement, there are no collective
bargaining or other labour union agreements to which Certicom or any of its
Subsidiaries is a party or by which any of them is bound. Since May 1, 2007,
neither Certicom nor any of its Subsidiaries has encountered any labour union
organizing activity, or had any actual or, to the knowledge of Certicom,
threatened employee strikes, work stoppages, slowdowns or lockouts. None of the
employees of Certicom or any of its Subsidiaries is represented by any union
with respect to his or her employment by Certicom or such Subsidiary. Each of
Certicom and its Subsidiaries is, and since May 1, 2007, has been, in compliance
in all material respects with all applicable Laws and Judgments relating to
employment and employment practices, occupational safety and health standards,
terms and conditions of employment and wages and hours, and is not, and since
May 1, 2007, has not, engaged in any unfair labour practice. As of the date
hereof, Certicom has not received notice of any unfair labour practice charge or
complaint against Certicom or any of its Subsidiaries that is pending, and, to
the knowledge of Certicom, there is no unfair labour practice charge or
complaint against Certicom or any of its Subsidiaries threatened, in each case
before any board or tribunal with respect to any employment or labour matters.

 

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  (iii) To the knowledge of Certicom, no Certicom Personnel is a party to or
bound by any Contract, is subject to any Judgment or is a party to any
Litigation, in each case, that may interfere with the use of such Certicom
Personnel’s best efforts to promote the interests of Certicom and its
Subsidiaries, conflict with the operations or business of Certicom or any of its
Subsidiaries (as currently conducted or as currently proposed to be conducted)
or the transactions contemplated by this Arrangement Agreement or could
reasonably be expected to adversely affect Certicom or any of its Subsidiaries
in any material respect. To the knowledge of Certicom, no activity of any
Certicom Personnel as or while Certicom Personnel has caused a violation of any
employment Contract, confidentiality agreement, patent disclosure agreement or
other Contract. The execution and delivery of this Arrangement Agreement and the
completion of the transactions contemplated hereby (including the Arrangement)
and compliance by Certicom and its Subsidiaries with the provisions of this
Arrangement Agreement do not and will not conflict with, or result in any
violation or breach by Certicom or any of its Subsidiaries of, or default by
Certicom or any of its Subsidiaries (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result in, termination, cancellation
or acceleration of any material obligation of Certicom or any of its
Subsidiaries or to a loss of a material benefit by Certicom or any of its
Subsidiaries under, or result in the creation of any Lien in or upon any of the
properties or assets of Certicom or any of its Subsidiaries under, or give rise
to any materially increased, additional, accelerated or guaranteed rights or
entitlements against Certicom or any of its Subsidiaries under, any Contract
under which any Certicom Personnel is now obligated.

 

  (k)

Environmental Matters. (i) Each of Certicom and its Subsidiaries is, and since
May 1, 2007, has been, in compliance in all material respects with all
applicable Environmental Laws, and as of the date hereof neither Certicom nor
any of its Subsidiaries has received any written communication alleging that
Certicom or such Subsidiary is in violation of, or may have liability under, any
Environmental Law; (ii) each of Certicom and its Subsidiaries possesses and is
in compliance in all material respects with all Permits required under
applicable Environmental Laws for the conduct of their respective operations as
now being conducted, and all such Permits are in good standing; and (iii) there
are no material Environmental Claims pending or, to the knowledge of Certicom,
threatened against Certicom or any of its Subsidiaries. For all purposes of this
Arrangement Agreement, (A) “Environmental Claims” means any

 

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and all administrative, regulatory or judicial actions, suits, Judgments,
demands, directives, claims, Liens, investigations, proceedings or written or
oral notices of noncompliance or violation by or from any person alleging
liability of any kind or nature (including liability or responsibility for the
costs of enforcement proceedings, investigations, cleanup, governmental
response, removal or remediation, natural resource damages, property damages,
personal injuries, medical monitoring, penalties, contribution, indemnification
and injunctive relief) arising out of, based on or resulting from the failure to
comply with any Environmental Law; and (B) “Environmental Law” means any Law,
Judgment, legally binding agreement or Permit issued, promulgated or entered
into by or with any Governmental Entity relating to pollution, the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata), natural resources or human health and safety.

 

  (l) Pension and Benefit.

 

  (i) Section 3.1(l)(i) of the Disclosure Letter sets forth a complete and
correct list of all Benefit Plans and all material Benefit Agreements (which,
for greater certainty, includes all Benefit Agreements between Certicom or any
of its Subsidiaries, on one hand, and any director or officer of Certicom or any
of its Subsidiaries or shareholder of Certicom, on the other). Certicom has
delivered or made available to the Acquiror current and complete copies of all
Benefit Plans and Benefit Agreements, as amended to date, together with all
other material documents relating to the Benefit Plans and Benefit Agreements.

 

  (ii) There are no Benefit Plans or Benefit Agreements providing pensions,
superannuation benefits or retirement savings including pension plans, top up
pensions or supplemental pensions, “registered retirement savings plans” (as
defined in the Tax Act), “registered pension plans” (as defined in the Tax Act)
and “retirement compensation arrangements” (as defined in the Tax Act) to
Certicom Personnel or other persons employed or resident in Canada other than a
plan to make employer contributions of up to $2,000 per year for each individual
that is a Certicom Personnel.

 

  (iii)

Each Benefit Plan is, and has been, established, registered, amended, funded,
administered and invested in compliance in all material respects with the terms
of such Benefit Plan (including the terms of any Benefit Agreement or other
documents in respect of such Benefit Plan) and all Laws. Neither Certicom nor
any of its Subsidiaries has received, in the last three years, any notice from
any person questioning or challenging such compliance, and Certicom has no
knowledge of any such notice

 

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beyond the last three years. There is no investigation by a Governmental Entity,
pending termination proceedings or other claims (other than routine claims for
payment of benefits), suits or proceedings pending or, to the knowledge of
Certicom threatened involving any Benefit Plan or their assets, and no facts
exist which could reasonably be expected to give rise to any claims (other than
routine claims for payment of benefits), suits or proceedings. All reports,
returns and similar documents with respect to all Benefit Plans required to be
filed with any Governmental Entity or distributed to any Benefit Plan
participant have been duly and timely filed or distributed.

 

  (iv) Neither Certicom nor any of its Subsidiaries has any formal plan or has
made any promise or commitment, whether legally binding or not, to create any
additional Benefit Plan or to improve or change the benefits provided under any
Benefit Plan.

 

  (v) None of the Benefit Plans provide for benefit increases or acceleration
of, or an increase on, securing or funding obligations that are contingent upon,
or will be triggered by, the entering of this Arrangement Agreement or the
completion of the transactions contemplated herein.

 

  (vi) Except as set forth in Section 3.1(l)(vi) of the Disclosure Letter, there
are no Benefit Plans to which the Company or its Subsidiaries are required to
contribute which are not maintained or administered by the Company or its
Subsidiaries.

 

  (vii) All data necessary to administer each Benefit Plan is in the possession
of the Company or its agent and is in a form which is sufficient for the proper
administration of the Benefit Plan in accordance with its terms and all Laws and
such data is complete and correct.

 

  (viii) None of the Benefit Plans, or any Benefit Agreements, require or permit
a retroactive increase in premiums or payments, or require additional premiums
or payments on termination of the Benefit Plan or any Benefit Agreement relating
thereto.

 

  (ix) All employer and employee payments, contributions and premiums required
to be remitted, paid to or in respect of each Benefit Plan have been paid or
remitted in a timely fashion in accordance with its material terms and Laws.
Neither Certicom nor any of its Subsidiaries has incurred, or is reasonably
likely to incur, any unfunded liabilities in relation to any Benefit Plan that
have not been properly accounted for under GAAP.

 

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  (x) There are no agreements, or undertakings, written or oral, other than
those set forth in the written Benefit Plans that would result in any material
liability to Certicom or any of its Subsidiaries on or at any time after the
Effective Date on amendment or termination of any Benefit Plan (including any
Benefit Plan covering retirees or other former employees).

 

  (xi) None of the Benefit Plans provide benefits beyond retirement or other
termination of service to Certicom Personnel except where the cost thereof is
borne entirely by the former employee (or his or her eligible dependents or
beneficiaries) or as required by applicable Law.

 

  (m) Taxes.

 

  (i) Each of Certicom and each of its Subsidiaries has filed in the prescribed
form and within the prescribed time all tax returns required to be filed by it,
and all such tax returns are complete and correct in all material respects. Each
of Certicom and its Subsidiaries has timely paid all material taxes due and
payable by it, including all instalments on account of taxes for the current
year that are due and payable by it, whether or not assessed and whether or not
shown on any tax return, other than taxes being contested in good faith and for
which adequate reserves, in accordance with GAAP, have been established. The
most recent financial statements contained in the Filed CSA Documents reflect an
adequate reserve, in accordance with GAAP for amounts at least equal to the
amount of all material taxes payable by Certicom and its Subsidiaries that are
not yet due and payable whether or not assessed and whether or not shown as
being due on any tax returns and that relate to periods ending on or prior to
the date of such financial statements, and Certicom and has made adequate
provisions in accordance with GAAP in their books and records for any taxes
accruing in respect of any period which has ended subsequent to the period
covered by such financial statements.

 

  (ii)

As of the date hereof, no tax return of Certicom or any of its Subsidiaries is,
to the knowledge of Certicom, currently under audit or examination by any taxing
authority, and no written notice of such an audit or examination has been
received by Certicom or any of its Subsidiaries. There is no deficiency,
assessment or reassessment, refund litigation, proposed adjustment or matter in
controversy with respect to any taxes due and owing by Certicom or any of its
Subsidiaries. Any deficiency, assessment or reassessment resulting from any
completed audit or examination or concluded litigation relating to

 

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taxes by any taxing authority has been timely paid. Except as set out in
Section 3.1(m)(ii) of the Disclosure Letter, as of the date hereof, no proposed
adjustments relating to taxes were raised in writing by the relevant taxing
authority during any presently pending audit or examination, and no proposed
adjustments relating to taxes were raised in writing by the relevant taxing
authority in any completed audit or examination that could reasonably be
expected to recur in a later taxable period.

 

  (iii) Neither Certicom nor any of its Subsidiaries has requested any extension
of time within which to file any tax return which tax return has not yet been
filed and there is no currently effective agreement or other document extending
the period of assessment or collection of any taxes.

 

  (iv) No Liens for taxes exist with respect to any assets or properties of
Certicom or any of its Subsidiaries, except for Liens imposed by applicable Laws
for taxes not yet due and Liens for taxes that Certicom or any of its
Subsidiaries is contesting in good faith through appropriate proceedings and for
which adequate reserves, in accordance with GAAP, have been established.

 

  (v) Each of Certicom and its Subsidiaries has complied in all material
respects (individually or in the aggregate) with all applicable Laws relating to
the withholding and remittance of taxes and have, within the time and the manner
prescribed by Law, withheld all material taxes and other amounts (individually
or in the aggregate) required to be so withheld and has duly and timely remitted
to the appropriate taxing authority such taxes and other amounts required by Law
to be remitted by it.

 

  (vi) Each of Certicom and its Subsidiaries has conducted all aspects of its
business in accordance with the terms and conditions of all tax rulings and tax
concessions that were provided by any relevant taxing authority.

 

  (vii) Since the publication date of Certicom’s most recently published
consolidated financial statements, no material tax liability not reflected in
such statements or otherwise provided for in the books and records of Certicom
in accordance with GAAP has been assessed, proposed to be assessed, incurred or
accrued.

 

  (viii) Each of Certicom and its Subsidiaries has duly and timely collected all
material amounts on account of any sales or transfer taxes, including goods and
services taxes, harmonized sales and provincial or territorial sales taxes,
required by applicable Laws to be collected by it and has duly and timely
remitted to the appropriate Governmental Entity any such amounts required by
applicable Laws to be remitted by it.

 

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  (ix) Except as set out in Section 3.1(m)(ix) of the Disclosure Letter, none of
Certicom or any of the Subsidiaries has made, prepared and/or filed any
elections, designations, or similar filings relating to taxes or entered into
any agreement or other arrangement in respect of taxes or tax returns that has
any material effect for any period ended after the Effective Date.

 

  (x) Certicom has delivered or made available to the Acquiror (A) complete and
correct copies of all tax returns of Certicom and each of its Subsidiaries
relating to taxes for the past three taxable periods and (B) complete and
correct copies of all tax rulings (including private letter rulings), taxation
authority reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests, transfer pricing studies,
valuation studies and any similar documents received from or submitted to a
taxation authority by, or agreed to by or on behalf of Certicom and/or any of
its Subsidiaries, and relating to taxes for the past three taxable periods.

 

  (xi) Neither Certicom nor any of its Subsidiaries is a party to, bound by any
or currently has any liability under any tax sharing agreement, tax indemnity
obligation or similar agreement or arrangement with respect to taxes (including
any advance pricing agreement, closing agreement or other similar written
agreement relating to taxes with any taxing authority).

 

  (xii) To the knowledge of Certicom, the Company has not participated, directly
or through a partnership, in a transaction or series of transactions
contemplated in subsection 247(2) of the Tax Act or any comparable law in any
province or territory in Canada. Certicom has delivered or made available to the
Acquiror complete and correct copies of all transfer pricing studies
commissioned by the Company since 2005.

 

  (xiii) To the knowledge of Certicom, which has not completed a formal study of
its “paid-up capital” of the Certicom Shares, the “paid-up capital” of the
Certicom Shares for purposes of the Tax Act is approximately $39 million.

 

  (xiv) Except pursuant to this Arrangement Agreement, for purposes of the Tax
Act or any other applicable tax statute, no person or group of persons has ever
acquired or had the right to acquire control of Certicom or any of its
Subsidiaries.

 

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  (xv) None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act, or
any equivalent provision of the tax legislation of any province or any other
jurisdiction, have applied or will apply to Certicom or any of its Subsidiaries
at any time up to and including the Closing Date.

 

  (xvi) None of Certicom or any of its Subsidiaries has acquired property from a
non-arm’s length person, within the meaning of the Tax Act, for consideration,
the value of which is less than the fair market value of the property acquired
in circumstances which could subject it to a liability under section 160 of the
Tax Act.

 

  (xvii) For purposes of this Arrangement Agreement, (A) “taxes” shall include
all federal, provincial, state and local, domestic and foreign income,
franchise, property, sales, goods and services, harmonized sales, excise,
employment, employer health, payroll, health, social security, value-added, ad
valorem, transfer, withholding and other taxes, including taxes based on or
measured by gross receipts, profits, capital, sales, use or occupation, tariffs,
levies, customs duties and import and export taxes, countervail and
anti-dumping, license or registration fees, Canada, Quebec and other government
pension plan premiums or contributions, impositions, assessments or governmental
charges of any nature whatsoever, including any interest, penalties, fines or
additions with respect thereto and including any transfer pricing penalties
imposed by a taxation authority; (B) “taxing authority” means any Governmental
Entity exercising regulatory authority in respect of any taxes; and (C) “tax
return” means any returns, reports, declarations, elections, notices, filings,
forms, statements and other documents (whether in tangible, electronic or other
form) and including any amendments, schedules, attachments, supplements,
appendices and exhibits thereto made, prepared, filed or required to be made,
prepared or filed in respect of taxes.

 

  (n) Properties.

 

  (i)

Each of Certicom and its Subsidiaries has good and marketable title to, or in
the case of leased property and leased tangible assets has valid and enforceable
leasehold interests in, all of its properties and tangible assets, except for
such properties and tangible assets as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the ordinary course of
business and except for defects in title, easements, restrictive covenants,
taxes that are not yet delinquent and similar encumbrances that, individually or
in the aggregate, have not materially interfered with, and is not reasonably
likely to

 

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materially interfere with, the ability of Certicom and its Subsidiaries to use
such property and assets in the business of Certicom and its Subsidiaries as
currently conducted and as proposed by Certicom to be conducted. All such
properties and tangible assets, other than properties and tangible assets in
which Certicom or any of its Subsidiaries has a leasehold interest, are free and
clear of all Liens, except for Permitted Liens.

 

  (ii) Section 3.1(n)(ii) of the Disclosure Letter sets forth a complete and
correct list as of the date of this Arrangement Agreement of all real property
and interests in real property leased by Certicom or any of its Subsidiaries
(each such property, a “Leased Real Property”). Neither Certicom nor any of its
Subsidiaries currently owns, or has previously owned, in fee any real property
or interests in real property.

 

  (iii) With respect to each Leased Real Property, (A) the transactions
contemplated by this Arrangement Agreement do not require the consent of any
party to any lease and (B) neither Certicom nor any of its Subsidiaries has
subleased, licensed or otherwise granted anyone the right to use or occupy such
Leased Real Property or any material portion thereof.

 

  (iv) Each of Certicom and its Subsidiaries is in compliance in all material
respects with the terms of all leases of Leased Real Property to which it is a
party and under which it is in occupancy, and each such lease is a legal, valid
and binding agreement of Certicom or its Subsidiary, as the case may be and, to
the knowledge of Certicom, of each other party thereto, enforceable against
Certicom or such Subsidiary, as the case may be, and, to the knowledge of
Certicom, against the other party or parties thereto, in each case, in
accordance with its terms, subject to the Bankruptcy and Equity Exception. Each
of Certicom and its Subsidiaries enjoys peaceful and undisturbed possession in
all material respects under all the leases to material Leased Real Property to
which it is a party and under which it is in occupancy.

 

  (o) Intellectual Property.

 

  (i)

Section 3.1(o)(i) of the Disclosure Letter sets forth a complete and correct
list of (A) all issued patents, patent applications, registered trade-marks,
trade-mark applications, trade names, domain names, registered service marks,
service mark applications, registered copyrights and mask work rights and
applications therefor owned by Certicom or any of its Subsidiaries as of the
date of this Arrangement Agreement (the “Registered Certicom IP”), (B) all other
material Intellectual

 

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Property owned by Certicom or any of its Subsidiaries as of the date of this
Arrangement Agreement (together with the Registered Certicom IP, the “Certicom
Owned IP”) and (C) all material Certicom Licensed IP.

 

  (ii)     

 

  (A) Certicom and each of its Subsidiaries owns, or is licensed or otherwise
has the right to use (in each case, free and clear of any Liens, other than
Permitted Liens) all Intellectual Property necessary for or material to the
conduct of its business as currently conducted.

 

  (B) All Registered Certicom IP has been duly registered and/or filed, as
applicable, with or issued by each applicable Governmental Entity in each
applicable jurisdiction, all necessary affidavits of continuing use have been
filed, and all necessary maintenance fees have been paid to continue all such
rights in effect.

 

  (C) To the knowledge of Certicom, none of Certicom or any of its Subsidiaries
or any of its or their products or services nor any Third Party Software as
contained in, incorporated into, bundled with or used by such products or
services has materially infringed upon or otherwise materially violated, or is
materially infringing upon or otherwise materially violating, the Intellectual
Property rights of any third party.

 

  (D) There is no Litigation pending or, to the knowledge of Certicom,
threatened with respect to, any possible infringement or other violation in any
material respect by Certicom or any of its Subsidiaries or any of its or their
products or services of the Intellectual Property rights of any third party. To
the knowledge of Certicom, there is no investigation pending or threatened with
respect to any possible infringement or other violation in any material respect
by Certicom or any of its Subsidiaries or any of its or their products or
services of the Intellectual Property rights of any third party.

 

  (E)

Except as set forth in Section 3.1(o)(ii)(E) of the Disclosure Letter, Certicom
has not notified any person that such person or any product or service of such
person is infringing upon or otherwise violating in any material respect any
Certicom Owned IP. No licensor of any Certicom Licensed IP has notified or
otherwise informed

 

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Certicom or any of its Subsidiaries in writing that any person or any product or
service of any person is infringing upon or otherwise violating in any material
respect any Certicom Licensed IP.

 

  (F) All Certicom IP that is confidential or proprietary has been maintained in
confidence in accordance with protection procedures customarily recognized as
best practices in Certicom’s industry to protect rights of like importance. Each
of the former or current members of management or key personnel of Certicom or
any of its Subsidiaries, including all former and current employees, agents,
consultants and independent contractors who have contributed to or participated
in the conception and development of material Intellectual Property owned,
intended to be owned or used by Certicom or any of its Subsidiaries (all such
persons, the “IP Contributing Parties”), have assigned or otherwise transferred
to Certicom or any of its Subsidiaries all ownership and other rights of any
nature whatsoever (to the extent permitted by Law) of such IP Contributing Party
in such Intellectual Property, have waived in favour of Certicom or any of its
Subsidiaries any moral rights or other similar rights of such IP Contributing
Party in such Intellectual Property, and none of the IP Contributing Parties
have a valid claim against Certicom or any of its Subsidiaries in connection
with the involvement of such IP Contributing Party in the conception and
development of any such Intellectual Property, and no such claim has been
asserted or threatened against Certicom or any of its Subsidiaries. None of
Certicom or any of its Subsidiaries or, to the knowledge of Certicom, any of
their current or former Certicom Personnel has any patents issued or
applications pending for any device, process, method, design or invention of any
kind now used or needed by Certicom or any of its Subsidiaries in the
furtherance of its business operations as currently conducted or as currently
proposed to be conducted, which patents or applications have not been assigned
to Certicom or such Subsidiary with such assignment duly recorded with the
applicable Governmental Entity.

 

  (G)

To the extent Third Party Software is distributed to customers of Certicom or
any of its Subsidiaries together with Certicom Owned IP, (1) any third party
rights have been identified in Section 3.1(o)(ii)(G)(1) of the Disclosure
Letter, (2) all necessary licenses have been

 

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obtained and (3) no royalties or payments are due (or such royalties and
payments are identified in Section 3.1(o)(ii)(G)(2) of the Disclosure Letter).

 

  (H) Except as disclosed in Section 3.1(o)(ii)(H) of the Disclosure Letter,
none of the trade secrets or confidential information of Certicom or any of its
Subsidiaries has been published or disclosed by Certicom or any of its
Subsidiaries, except pursuant to non-disclosure agreements entered into by
Certicom or, to the knowledge of Certicom, by any other person to any person
except pursuant to licenses or Contracts requiring such other person to keep
such trade secrets confidential (which licenses or Contracts will be enforceable
by Certicom or such Subsidiary after the Effective Time to an extent sufficient
to exploit all trade secrets material to the operations and businesses of
Certicom and its Subsidiaries as currently conducted or as currently proposed by
Certicom to be conducted).

 

  (I) None of the products of Certicom or its Subsidiaries contains code or
interfaces based on or created using information or source code owned by a third
party to enable its functions, other than information, documentation or source
code which is either publicly available or with respect to which Certicom or a
Subsidiary has been granted a perpetual license.

 

  (J) Except as disclosed in Section 3.1(o)(ii)(J) of the Disclosure Letter, no
person has any exclusive use, marketing rights or distribution rights to any
Certicom Owned IP, or any material marketing rights or material distribution
rights, in each case, which cannot be terminated on 30 days notice without any
cost or penalty to Certicom or any of its Subsidiaries.

 

  (K) Neither Certicom nor any of its Subsidiaries has sold, exclusively
licensed or otherwise transferred ownership of any Intellectual Property to any
person, other than to Certicom or one of its Subsidiaries.

 

  (L)

Except for source code provided to third party developers to make modifications
or Derivative Works for the benefit of Certicom or any Subsidiary, no Source
Code has been published or disclosed by Certicom or any of its Subsidiaries and
no licenses or rights have been granted to a third person to distribute the
Source Code for, or to

 

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use any Source Code to create Derivative Works of, any Certicom Owned IP
included in any product currently marketed by, commercially available from or
under development by Certicom or any of its Subsidiaries for which Certicom
possesses the Source Code. Except as disclosed in Section 3.1(o)(ii)(L) of the
Disclosure Letter, none of the Source Code forming part of the Certicom IP has
been deposited in escrow and Certicom has not entered into any arrangement under
which Source Code may be released to any person upon the happening of certain
events or conditions.

 

  (M) Certicom and each of its Subsidiaries has (1) created and has safely
stored back-up copies of all their material computer programs and Software
(including object code, source code and associated data and documentation,
including Ancillary Software IP), and (2) taken reasonable steps to protect
their Certicom IP and their rights thereunder, and to the knowledge of Certicom,
no such rights to any Certicom IP have been lost or are in jeopardy of being
lost through failure to act by Certicom or any of its Subsidiaries.

 

  (N) Section 3.1(o)(ii)(N) of the Disclosure Letter identifies any and all Open
Source, public source or freeware software or any modification or derivative
thereof, including any version of any software licensed pursuant to any GNU,
general public license, LGPL or limited general public license, that is used in,
incorporated into, integrated or bundled with Certicom IP.

 

  (O) Except as set out in Schedule 3.1(o)(ii)(O), none of Certicom or any of
its Subsidiaries has provided any services pursuant to Contracts that
contemplate ownership by a third party of Intellectual Property created in
connection with such services that is used in products or services of Certicom
or any of its Subsidiaries.

 

  (P) Certicom and its Subsidiaries have complied, and continue to comply, with
the material terms and conditions of the licenses under which Certicom Licensed
IP has been licensed.

 

  (Q)

No Certicom Licensed IP has been modified by Certicom or any of its
Subsidiaries, except if (1) modifications are permitted pursuant to the terms
and conditions of the license under which such Certicom Licensed IP has been

 

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licensed; and (2) in the case of material Certicom Licensed IP, indicated as
being modified by Certicom in Section 3.1(o)(i) of the Disclosure Letter.

 

  (iii) For purposes of this Arrangement Agreement, “Derivative Work” is a work
based upon one or more pre-existing works, such as a translation, musical
arrangement, dramatization, fictionalization, motion picture version, sound
recording, art reproduction, abridgment, condensation, or any other form in
which a work may be recast, transformed, or adapted.

 

  (iv)

For purposes of this Arrangement Agreement, (A) “Intellectual Property” means
Software, Ancillary Software IP, trademarks, service marks, brand names,
certification marks, trade dress, assumed names, domain names, trade names and
other indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patentable or not in any jurisdiction; patents, applications for patents
(including divisions, provisionals, continuations, continuations in-part and
renewal applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; non-public information, trade secrets, know-how, formulae,
processes, procedures, research records, records of invention, test information,
market surveys, software and confidential information, whether patentable or not
in any jurisdiction and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works, whether
copyrightable or not in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights; and any claims
or causes of action (pending, threatened or which could be filed) arising out of
any infringement or misappropriation of any of the foregoing; (B) “Software”
means all types of computer software programs, including operating systems,
application programs, software tools, firmware and software imbedded in
equipment, including both object code and source code; (C) “Ancillary Software
IP” means all written or electronic data, documentation, and materials that
explain the structure or use of Software or that were used in the development of
Software or are used in the operation of the Software including logic diagrams,
flow charts, procedural diagrams, error reports, manuals and training materials,
look-up tables and databases; (D) “Third Party Software” means Software with
respect to which a third party holds any copyright or other ownership right
(and, therefore, such Software is not owned exclusively by Certicom or any of
its Subsidiaries);

 

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(E) “Certicom Licensed IP” means any Intellectual Property licensed to Certicom
or any of its Subsidiaries; (F) “Certicom IP” means Certicom Owned IP and
material Certicom Licensed IP; (G) “Open Source Software” means Software
licensed under terms that require as a condition of modification or distribution
of the Software that the Source Code of such Software (or other Software
combined or distributed with such Software) be disclosed or distributed to third
persons; and (H) “Source Code” means the human readable code of any Software.

 

  (p) Customers. As of the date of this Arrangement Agreement, no customer of
Certicom that represented 5% or more of Certicom’s consolidated revenues in the
fiscal year ended April 30, 2008, has indicated to Certicom that it will stop,
or materially decrease the rate of, buying materials, products or services from
Certicom.

 

  (q) Insurance. Copies of all material insurance policies have been made
available to the Acquiror. All such material policies are in full force and
effect, all premiums due and payable thereon have been paid, and no notice of
cancellation or termination has been received with respect to any such material
policy which has not been replaced on substantially similar terms prior to the
date of such cancellation. There is no material claim pending under any such
material policies as to which coverage has been questioned, denied or disputed.

 

  (r) Shareholder Rights Plan. The Shareholder Rights Plan does not apply to
this Arrangement Agreement, the Arrangement or the acquisition of Certicom
Shares thereunder.

 

  (s)

Brokers; Schedule of Fees and Expenses. No broker, investment banker, financial
advisor or other person, other than TD Securities Inc., the fees and expenses of
which will be paid by Certicom, is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission in connection with the Arrangement
and the other transactions contemplated by this Arrangement Agreement based upon
arrangements made by or on behalf of Certicom. Certicom has delivered to the
Acquiror complete and correct copies of all agreements under which any such fees
or commissions are payable and all indemnification and other agreements related
to the engagement of the persons to whom such fees are payable. The fees and
expenses of any accountant, broker, financial advisor, consultant, legal counsel
or other person retained by Certicom in connection with this Arrangement
Agreement or the transactions contemplated hereby incurred or to be incurred by
Certicom in connection with this Arrangement Agreement and the transactions
contemplated by this Arrangement Agreement and not yet paid will not exceed the
fees and expenses set forth in Section 3.1(s) of the Disclosure Letter. Neither
Certicom nor any of its Subsidiaries has paid or agreed to pay any fee,

 

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commission or expense incurred by any Shareholder (including the fees,
commissions or expenses of any accountant, auditor, broker, financial advisor,
consultant or legal counsel retained by or on behalf of any Shareholder) arising
from or in connection with this Arrangement Agreement or the transactions
contemplated hereby.

 

  (t) Opinion of Financial Advisor. Certicom has received the written Fairness
Opinion of TD Securities Inc. to the effect that, as of the date of this
Arrangement Agreement, and based upon and subject to the qualifications and
assumptions set forth therein, the Arrangement is fair, from a financial point
of view, to Certicom Shareholders (other than the Acquiror), a copy of which
Fairness Opinion has been delivered to the Acquiror.

 

  (u) Confidentiality Obligations. The conduct of the businesses of Certicom and
its Subsidiaries as currently conducted and as currently proposed by Certicom to
be conducted does not materially violate or conflict with any obligation of
confidentiality to any other person.

 

  (v) Government Contracts.

 

  (i) To the knowledge of Certicom, none of the employees, consultants or agents
of Certicom or any of its Subsidiaries is or during the last two years has been
(except as to routine security investigations) under administrative, civil or
criminal investigation or indictment by any Governmental Entity in connection
with their employment at Certicom or any of its Subsidiaries. There is no
pending, and during the last two years there has been no, audit or, to the
knowledge of Certicom, investigation by a Governmental Entity with respect to
any alleged improper activity, misstatement or omission arising under or
relating to any Contract between or among Certicom or any of its Subsidiaries
and any Governmental Entity (a “Government Contract”). During the last two
years, neither Certicom nor any of its Subsidiaries has conducted or initiated
any internal investigation, has had reason to conduct, initiate or report any
internal investigation, or has made a voluntary disclosure with respect to any
alleged improper activity, misstatement or omission arising under or relating to
a Government Contract. None of Certicom, its Subsidiaries nor, to the knowledge
of Certicom, any of their respective employees, consultants or agents has made
any intentional misstatement or omission in connection with any voluntary
disclosure that has led, or is expected to lead, either before or after the
Effective Date, to any of the consequences set forth in the immediately
preceding two sentences or any other damage, penalty assessment, recoupment of
payment or disallowance of cost.

 

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  (ii) There are (A) no outstanding claims against Certicom or any of its
Subsidiaries by a Governmental Entity or by any prime contractor, subcontractor,
vendor or other third party arising under or relating to any Government Contract
that is reasonably likely to result in a material liability to Certicom or any
of its Subsidiaries, a suspension or debarment of Certicom or any of its
Subsidiaries from doing business with a Governmental Entity, a finding of
non-responsibility or ineligibility for contracting with a Governmental Entity
or any other material impairment of any business relationship between Certicom
and any of its Subsidiaries, on the one hand, and a Governmental Entity, on the
other hand, and (B) no material disputes between Certicom or any of its
Subsidiaries and a Governmental Entity or between Certicom or any of its
Subsidiaries and any prime contractor, subcontractor or vendor arising under or
relating to any Government Contract. To the knowledge of Certicom, no event,
condition or omission has occurred that would reasonably constitute grounds for
a claim or a dispute under clause (A) or (B). Neither Certicom nor any of its
Subsidiaries has an interest in any pending or potential claim against a
Governmental Entity or any prime contractor, subcontractor or vendor arising
under or relating to any Government Contract.

 

  (iii) None of Certicom, its Subsidiaries or, to the knowledge of Certicom, any
of their respective employees, consultants or agents is (or during the last four
years has been) suspended or debarred from doing business with a Governmental
Entity or is (or during such period was) the subject of a finding of
non-responsibility or ineligibility for contracting with a Governmental Entity.

 

  (iv) All test and inspection results that Certicom or its Subsidiaries have
provided to a Governmental Entity or any other entity pursuant to a Government
Contract or as a part of the delivery to a Governmental Entity pursuant to a
Government Contract of any article designed, engineered or manufactured by
Certicom or its Subsidiaries were complete and correct in all material respects.
Either Certicom or one of its Subsidiaries has provided all material test and
inspection results to the relevant Governmental Entity pursuant to each
Government Contract as required by applicable Laws and the terms of the
applicable Government Contract.

 

  (v)

With respect to each Government Contract (A) all material representations and
certifications of Certicom, any of its Subsidiaries, or any of their respective
officers, directors or employees set forth in or pertaining to such Government
Contract

 

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were current, complete and correct as of their effective date, and Certicom or
one of its Subsidiaries has complied in all material respects with all such
representations and certifications; (B) as of the date of this Arrangement
Agreement, no Governmental Entity nor any prime contractor, subcontractor or
other entity has notified Certicom or its Subsidiaries in writing that Certicom
or its Subsidiaries has materially breached or violated any applicable Laws
pertaining to such Government Contract; (C) as of the date of this Arrangement
Agreement, no termination for default, cure notice or show cause notice is in
effect pertaining to such Government Contract and (D) as of the date of this
Arrangement Agreement, to the knowledge of Certicom, no event, condition or
omission has occurred or exists that would constitute grounds to any action
referred to in clause (C); (E) as of the date of this Arrangement Agreement, to
the knowledge of Certicom, no cost incurred by Certicom or its Subsidiaries
pertaining to such Government Contract is the subject of any investigation or
has been disallowed by the relevant Governmental Entity and (F) as of the date
of this Arrangement Agreement, no amount of money due to Certicom or its
Subsidiaries pursuant to such Government Contract has been withheld or set off.

 

  (w) Transactions with Affiliates. There are no material Contracts (other than
employment agreements entered into in the ordinary course of business) existing
between, among or involving Certicom or any of its Subsidiaries, on the one
hand, and any of their respective Certicom Personnel or shareholders or any of
their respective affiliates, on the other hand (including in respect of
purchasing, leasing or obtaining any product or service or in respect of any
Financial Indebtedness or Guarantee thereof). No Certicom Personnel or affiliate
of Certicom or any of its Subsidiaries has any direct or indirect ownership
interest in any person in which Certicom or any of its Subsidiaries has any
direct or indirect ownership interest.

 

  (x) U.S. Securities Laws. Certicom is not subject to the reporting
requirements of the federal or state securities laws of the United States of
America, or any rules or regulations thereunder, and is a “foreign issuer” as
defined under Regulation S promulgated under the U.S. Securities Act of 1933, as
amended. As at December 23, 2008, there were 46 persons with addresses in the
United States of America as reflected on the share registers of Certicom holding
an aggregate of 9,300,059 Certicom Shares, or approximately 19.48% of the total
number of Certicom Shares outstanding as at that date. To the knowledge of
Certicom, the number of Certicom Shares held by persons resident in the United
States of America as at that date and the date of this Arrangement Agreement is
less than 40% of the total number of Certicom Shares outstanding as at each such
date.

 

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  (y) Investment Canada Act. Neither Certicom nor any of its Subsidiaries
provides any services or engages in any of the activities of a business
described in subsection 14.1(5) of the Investment Canada Act.

 

  (z) No “Collateral Benefit”. To the knowledge of Certicom, no “related party”
of Certicom (within the meaning of CSA Multilateral Instrument 61-101 –
Protection of Minority Holders in Special Transactions (“MI 61-101”)) will
receive a “collateral benefit” (with the meaning of MI 61-101) as a consequence
of the transactions contemplated by this Arrangement Agreement.

 

3.2 Investigation

 

Any investigation by or knowledge of the Acquiror and their advisors shall not
mitigate, diminish or affect the representations and warranties of Certicom
pursuant to this Arrangement Agreement.

 

3.3 Survival of Representations and Warranties

 

The representations and warranties of Certicom contained in this Arrangement
Agreement shall expire and be terminated on the earlier of the Effective Date
and the date on which this Arrangement Agreement is terminated in accordance
with its terms.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

 

4.1 Representations and Warranties

 

The Acquiror represents and warrants to Certicom as follows:

 

  (a) Organization. The Acquiror is a corporation duly organized and validly
existing under the Laws of the jurisdiction of its organization and has all
requisite corporate power and authority to carry on its business as now being
conducted.

 

  (b)

Authority; Noncontravention. The Acquiror has the requisite corporate power and
authority to execute and deliver this Arrangement Agreement, to complete the
Arrangement and the other transactions contemplated by this Arrangement
Agreement and to comply with the provisions of this Arrangement Agreement. The
execution and delivery of this Arrangement Agreement by the Acquiror, the
completion by the Acquiror of the Arrangement and the other transactions
contemplated by this Arrangement Agreement and the compliance by the Acquiror
with the provisions of this Arrangement Agreement have been duly authorized by
all necessary corporate action on the part of the Acquiror, and no other
corporate

 

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proceedings on the part of the Acquiror are necessary to authorize this
Arrangement Agreement, to comply with the terms of this Arrangement Agreement or
to complete the Arrangement and the other transactions contemplated by this
Arrangement Agreement. This Arrangement Agreement has been duly executed and
delivered by the Acquiror and, assuming the due execution and delivery of this
Arrangement Agreement by Certicom, constitutes a valid and binding obligation of
the Acquiror, enforceable against the Acquiror in accordance with its terms,
subject to the Bankruptcy and Equity Exception. The execution and delivery of
this Arrangement Agreement, the completion of the Arrangement and the other
transactions contemplated by this Arrangement Agreement and the compliance by
the Acquiror with the provisions of this Arrangement Agreement do not and will
not conflict with, or result in any violation or breach of, or default (with or
without notice or lapse of time or both) under, or give rise to a right of, or
result in, termination, cancellation or acceleration of any material obligation
or to a loss of a material benefit under, or result in the creation of any
material Lien in or upon any of the material properties or assets of the
Acquiror under, or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under, any provision of (i) the Charter
Documents of the Acquiror, or (ii) subject to the governmental filings and other
matters referred to in the following sentence, any Law or Judgment, in each
case, applicable to the Acquiror or its material properties or assets, other
than, in the case of clause (ii), any such conflicts, violations, breaches,
defaults, terminations, cancellations, accelerations, losses, Liens, rights or
entitlements that, individually or in the aggregate, are not reasonably likely
to impair in any material respect the ability of the Acquiror to perform its
obligations under this Arrangement Agreement or prevent or materially impede or
materially delay the completion of the Arrangement or the other transactions
contemplated by this Arrangement Agreement. No consent, approval, order or
authorization of, registration, declaration or filing with, or notice to, any
Governmental Entity is required by or with respect to the Acquiror in connection
with the execution and delivery of this Arrangement Agreement by the Acquiror,
the completion by the Acquiror of the Arrangement or the other transactions
contemplated by this Arrangement Agreement or the compliance by the Acquiror
with the provisions of this Arrangement Agreement, except for (A) the filings
and receipt, termination or expiration, as applicable, of such other approvals
or waiting periods required under any applicable competition, merger control,
antitrust or similar Law, (B) the filing of a post-closing notification under
the Investment Canada Act, and (C) such other consents, approvals, orders,
authorizations, registrations, declarations, filings and notices, the failure of
which to be obtained or made, individually or in the aggregate, are not
reasonably likely to impair in any material respect the ability of the Acquiror
to perform its obligations under this Arrangement Agreement or prevent or
materially impede or materially delay the completion of the Arrangement or the
other transactions contemplated by this Arrangement Agreement.

 

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  (c) Certicom Shares. Neither the Acquiror nor any of its affiliates nor any
“joint actor” (as defined in MI 61-101) thereof owns or exercises control or
direction over any Certicom Shares.

 

  (d) Investment Canada Act. The Acquiror is either not a non-Canadian within
the meaning of the Investment Canada Act or, if the Acquiror is a non-Canadian,
the Acquiror qualifies as a WTO Investor within the meaning of the Investment
Canada Act.

 

  (e) Financing. The Acquiror has sufficient funds to fund the payment of the
aggregate Cash Proceeds per Share and Option Consideration payable by the
Acquiror and the Company, respectively, pursuant to the Plan of Arrangement on
the Effective Date in accordance with the terms hereof and thereof.

 

4.2 Investigation

 

Any investigation by or knowledge of Certicom and its advisors shall not
mitigate, diminish or affect the representations and warranties of the Acquiror
pursuant to this Arrangement Agreement.

 

4.3 Survival of Representations and Warranties

 

The representations and warranties of the Acquiror contained in this Arrangement
Agreement shall expire and be terminated on the earlier of the Effective Date
and the date on which this Arrangement Agreement is terminated in accordance
with its terms.

 

ARTICLE 5

COVENANTS

 

5.1 Covenants of Certicom Regarding the Conduct of Business

 

  (1) Certicom covenants and agrees that, during the period from the date of
this Arrangement Agreement until the earlier of the Effective Date and the time
that this Arrangement Agreement is terminated in accordance with its terms,
unless the Acquiror shall otherwise consent in writing, such consent not to be
unreasonably withheld or delayed, or as is otherwise expressly permitted or
specifically contemplated by this Arrangement Agreement or the Arrangement or
set forth in the Disclosure Letter:

 

  (a)

Certicom shall, and shall cause each of its Subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice,
comply in all material respects with the terms of all Specified Contracts and
use commercially reasonable efforts to comply with all applicable Laws and, to
the extent consistent therewith, use commercially reasonable

 

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efforts to keep available the services of their present officers, software
developers and other key employees and to preserve their assets and technology
and preserve their relationships with customers, suppliers, licensors,
licensees, distributors and others having material business dealings with them
and maintain their material franchises, rights and Permits;

 

  (b)

Certicom shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly: (i) amend its Charter Documents or other comparable organizational
documents or the Shareholder Rights Plan; (ii) declare, set aside or pay any
dividend or other distribution or payment (whether in cash, shares or property)
in respect of the Certicom Shares owned by any person or the securities of any
Subsidiary owned by a person other than Certicom; (iii) issue, grant, sell or
pledge or agree to issue, grant, sell or pledge any shares of Certicom or its
Subsidiaries, or securities convertible into or exchangeable or exercisable for,
or otherwise evidencing a right to acquire, shares of Certicom or its
Subsidiaries or any stock appreciation rights, phantom stock awards or other
rights that are linked to the value of Certicom Shares or the value of Certicom
or any part thereof, other than (A) the issuance of Certicom Shares issuable
pursuant to the terms of the outstanding Certicom Options, (B) the grant of
Certicom Options pursuant to the terms of contractual commitments set forth in
Section 5.1(1)(b) of the Disclosure Letter for the Certicom Stock Option Plans,
(C) transactions between two or more wholly-owned Subsidiaries of Certicom or
between Certicom and a wholly-owned Subsidiary of Certicom, (D) pursuant to
pledge commitments contained in written agreements set forth in
Section 5.1(1)(b) of the Disclosure Letter, and (E) as required under existing
Contracts set forth in Section 5.1(1)(b) of the Disclosure Letter; (iv) redeem,
purchase or otherwise acquire any of its outstanding securities or those of its
Subsidiaries or any options, warrants, calls or rights to acquire any such
securities (including any Certicom Options), unless otherwise required by the
terms of such securities and other than in transactions between two or more
wholly-owned Subsidiaries of Certicom or between Certicom and a wholly-owned
Subsidiary of Certicom; (v) amend the terms of any of its securities; (vi) adopt
a plan of liquidation or resolution providing for the liquidation or dissolution
of Certicom or any of its Subsidiaries, or undertake any merger, consolidation
or a reorganization of Certicom or any of its Subsidiaries; (vii) write-down any
of its assets, including any Intellectual Property, or amend its accounting
policies or adopt new accounting policies, in each case except as required in
accordance with GAAP; (viii) make any material tax election or settle or
compromise any material tax liability; (ix) split, combine or reclassify any
shares its capital or other equity or voting interests, or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares in its capital or other equity or voting interests;
(x) take any action that would result in any amendment, modification or change
of any term of any Financial

 

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Indebtedness of Certicom or any of its Subsidiaries; (xi) take any action
described in Section 3.1(f)(i)(D) to (H); or (xii) enter into, modify or
terminate any Contract with respect to any of the foregoing;

 

  (c) Certicom shall promptly notify the Acquiror in writing of any circumstance
or development that is or could reasonably be expected to constitute a Material
Adverse Effect or any change in any material fact set forth in the Disclosure
Letter;

 

  (d) Certicom shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly: (i) except in the ordinary course of business consistent
with past practice, sell, pledge, lease, license, dispose of or encumber any
assets of Certicom or of any Subsidiary thereof; (ii) acquire (by merger,
amalgamation, consolidation or acquisition of shares or assets) any corporation,
partnership or other business organization or division thereof, or make any
investment either by the purchase of securities or contributions of capital
(other than to wholly-owned Subsidiaries), (iii) acquire any material property
or assets of any person except for purchases of inventory in the ordinary course
of business; (iv) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other person, or make any loans or
advances except for refinancing of existing debt on substantially the same or
more favourable terms, except as set forth in the Disclosure Letter; (v) except
in the ordinary course of business, incur any liability or obligation; (vi) pay,
discharge or satisfy any material claims, liabilities or obligations other than
the payment, discharge or satisfaction of liabilities reflected or reserved
against in the unaudited interim financial statements of Certicom as at and for
the six months ended October 31, 2008; (vii) waive, relinquish, release, grant
or transfer any rights of material value; (viii) make or commit to make capital
expenditures that are, in the aggregate, in excess of $100,000; or
(ix) authorize or propose any of the foregoing, or enter into or modify any
Contract to do any of the foregoing;

 

  (e) subject to Section 5.1(2), Certicom shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly:

 

  (i) modify, amend, accelerate, terminate or cancel (A) any Specified Contract,
other than amendments to customer Contracts in the ordinary course of business,
or (B) any material provision of any Contract involving Intellectual Property
other than amendments to customer Contracts in the ordinary course of business,
or, in either case, waive, release or assign any material rights or claims
thereunder;

 

  (ii) enter into any lease or sublease of real property (whether as a lessor,
sublessor, lessee or sublessee), or modify, amend or exercise any right to renew
any lease or sublease of real property or acquire any interest in real property;

 

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  (iii) enter into any Contract containing any restriction on the ability of
Certicom or any of its Subsidiaries to assign all or any portion of its rights,
interests or obligations thereunder, unless such restriction expressly excludes
any assignment to Acquiror and any of its Subsidiaries in connection with or
following the consummation of the Arrangement or the other transactions
contemplated by this Arrangement Agreement; or

 

  (iv) enter into or modify any Contract or series of Contracts resulting in a
new Contract or series of related new Contracts or modifications to an existing
Contract or series of related existing Contracts outside the ordinary course of
business, including, without limitation, any of the foregoing that would
(A) result in any Vendor Contract having a term in excess of 24 months and which
is not terminable by Certicom or its Subsidiaries upon notice of 6 months or
less from the date of the relevant Contract or modification of Contract or
impose payment or other obligations on Certicom or any of its Subsidiaries in
excess of $200,000; or (B) otherwise have a Material Adverse Effect;

 

  (f) other than as is necessary to comply with applicable Laws, neither
Certicom nor any of its Subsidiaries shall (i) grant to any officer or director
of Certicom or any of its Subsidiaries an increase in compensation in any form,
grant any general salary increase, make any loan to any Certicom Personnel,
(ii) take any action with respect to the grant of, or increase in, any
severance, change of control, or termination pay to or enter into any employment
agreement with any Certicom Personnel, (iii) increase any benefits payable under
its current severance or termination pay policies, (iv) adopt or materially
amend or make any contribution to any Benefit Plan, Benefit Agreement or other
bonus, profit sharing, option, pension, retirement, deferred compensation,
insurance, incentive compensation, compensation or other similar plan,
agreement, trust, fund or arrangement for the benefit of any Certicom Personnel,
or (v) take any action to accelerate the time of payment or vesting of any
compensation or benefits under any Benefit Plan or Benefit Agreement;

 

  (g) Certicom shall not, and shall not permit any of its Subsidiaries to,
settle or compromise (i) any material action, claim or proceeding brought
against it and/or any of its Subsidiaries; or (ii) any action, claim or
proceeding brought by any present, former or purported holder of its securities
in connection with the transactions contemplated by this Arrangement Agreement
or the Arrangement;

 

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  (h) Certicom shall use its commercially reasonable efforts to cause the
current insurance (or re-insurance) policies maintained by Certicom or any of
its Subsidiaries, including directors’ and officers’ insurance, not to be
cancelled or terminated or any of the coverage thereunder to lapse, unless
simultaneously with such termination, cancellation or lapse, replacement
policies underwritten by insurance or re-insurance companies of nationally
recognized standing having comparable deductions and providing coverage equal to
or greater than the coverage under the cancelled, terminated or lapsed policies
for substantially similar premiums are in full force and effect; provided that
none of Certicom or any of its Subsidiaries shall obtain or renew any insurance
(or re-insurance) policy for a term exceeding 12 months from the date hereof;

 

  (i) Certicom shall not, and shall not permit any of its Subsidiaries to,
(i) take any action or fail to take any action which action or failure to act
would result in the material loss or reduction in value of the Certicom IP,
taken as a whole; or (ii) enter into any Contract providing for a license of
Intellectual Property;

 

  (j) Certicom shall not, and shall not permit any of its Subsidiaries to
(i) enter into, extend or renew (A) any Contract or amendment thereof which, if
executed prior to the date of this Arrangement Agreement, would have been
required to have been disclosed pursuant to Section 3.1(h)(A), (B), (H), (J) or
(N), (ii) any Contract or amendment thereof that grants any person the right or
ability to access, license or use all or a portion of Certicom IP, other than in
the ordinary course of business consistent with past practice, or (iii) any
Contract providing for the services of any dealer, distributor, sales
representative or similar representative; except, with respect to this clause
(iii), where (x) such entry, extension or renewal is in the ordinary course of
business and is not inconsistent with past practice, or (y) if the entry,
extension or renewal is other than on standard terms and conditions, including
any terms and conditions relating to geographic exclusivity, Certicom shall have
provided the Acquiror with prior written notice of the material terms of the
proposed Contract, extension or renewal and not less than 48 hours to comment on
such terms;

 

  (k) Certicom shall not, and shall not permit any of its Subsidiaries to, enter
into any Contract or material amendment to a Contract which contains any
provision listed in 3.1(h)(E), (F), (G), (I), (K), (L), (R), (S), (T) or (W);
and

 

  (l) Certicom shall not, and shall not permit any of its Subsidiaries to,
commence any Litigation (other than Litigation in connection with the collection
of accounts receivable, to enforce the terms of this Arrangement Agreement or
the Confidentiality Agreement or as a result of Litigation commenced against
Certicom or any of its Subsidiaries).

 

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  (2) Notwithstanding Section 5.1(1)(e), Certicom shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter into or modify
any Major Customer Contract or series of Major Customer Contracts resulting in a
new Major Customer Contract or series of related new Major Customer Contracts or
modifications to an existing Major Customer Contract or series of related
existing Major Customer Contracts outside the ordinary course of business,
including, without limitation, any of the foregoing that would (i) result in any
Major Customer Contract having a term in excess of 12 months from the date
hereof; (ii) result in any Major Customer Contract containing material
obligations of Certicom or any of its Subsidiaries in respect of which Certicom
or any of its Subsidiaries is not fully covered by an existing policy of
insurance (or re-insurance) that is in full force and effect; or (iii) otherwise
have a Material Adverse Effect.

 

  (3) Between the date of this Arrangement Agreement and the Effective Time,
subject to applicable Laws, Certicom shall consult in good faith on a reasonably
regular basis with the Acquiror to report material, individually or in the
aggregate, operational developments, the general status of relationships with
customers and resellers, the general status of ongoing operations and other
matters reasonably requested by the Acquiror pursuant to procedures reasonably
requested by the Acquiror; provided, however, that no such consultation shall
affect the representations, warranties, covenants, agreements or obligations of
the Parties (or remedies with respect thereto) or the conditions to the
obligations of the Parties under this Arrangement Agreement.

 

5.2 Covenants of Certicom Regarding the Performance of Obligations

 

Certicom shall and shall cause its Subsidiaries to perform all obligations
required or desirable to be performed by Certicom or any of its Subsidiaries
under this Arrangement Agreement, co-operate with the Acquiror in connection
therewith, and do all such other acts and things as may be necessary or
desirable in order to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated in this Arrangement Agreement and,
without limiting the generality of the foregoing, Certicom shall and, where
appropriate, shall cause its Subsidiaries to:

 

  (a) apply for and use all commercially reasonable efforts to obtain any
applicable regulatory approvals relating to Certicom or any of its Subsidiaries
which are required in order to consummate the Arrangement and, in doing so, keep
the Acquiror reasonably informed as to the status of the proceedings related to
obtaining such regulatory approvals, including providing the Acquiror with
copies of all related applications and notifications excluding any part thereof
constituting confidential information, in draft form, in order for the Acquiror
to provide its reasonable comments thereon; provided that Certicom shall not
make any commitments, provide any undertakings or assume any obligations, in
each case that are or would reasonably be expected to be material to Certicom or
the Acquiror without the prior written consent of the Acquiror, which shall not
be unreasonably withheld or delayed;

 

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  (b) defend all lawsuits or other legal, regulatory or other proceedings
against Certicom challenging or affecting this Arrangement Agreement or the
consummation of the transactions contemplated hereby;

 

  (c) use commercially reasonable efforts to assist in effecting the
resignations of the Certicom directors and cause them to be replaced as of the
Effective Date by persons nominated by the Acquiror;

 

  (d) use commercially reasonable efforts to: (i) assist the Acquiror in
obtaining all regulatory approvals referred to in Section 5.3(a); (ii) obtain
all necessary or desirable consents, waivers or approvals under the Specified
Contracts; provided that Certicom and its Subsidiaries shall not, without the
prior written consent of the Acquiror (not to be unreasonably withheld or
delayed), pay or commit to pay any money or issue or commit to issue any
guarantee of any obligations in connection with Certicom obtaining such
consents, waivers or approvals; and (iii) give all necessary or desirable
notices under the Specified Contracts;

 

  (e) subject to applicable Laws, effect such reorganizations of the business,
operations and assets of Certicom and its Subsidiaries or such other
transactions as the Acquiror may request, acting reasonably (each a
“Pre-Acquisition Reorganization”) and co-operate with the Acquiror and its
advisors in order to determine the nature of any Pre-Acquisition Reorganization
that might be undertaken and the manner in which they might most effectively be
undertaken; provided that any Pre-Acquisition Reorganization: (i) would not
require Certicom to obtain the prior approval of the Certicom Shareholders in
respect of such Pre-Acquisition Reorganization other than at the Special
Meeting; (ii) are not prejudicial to Certicom securityholders in that they would
not result in any taxes being imposed on, or any adverse tax or other
consequences to, any securityholder of Certicom incrementally greater than the
taxes or other consequences to such party in connection with the consummation of
the Arrangement in the absence of any Pre-Acquisition Reorganization; and
(iii) would not impede or materially delay the completion of the Arrangement.
The Acquiror shall provide written notice to Certicom of any proposed
Pre-Acquisition Reorganization at least ten Business Days prior to the Effective
Time. Upon receipt of such notice, the Acquiror and Certicom shall, if Certicom
is required to do so pursuant to the immediately preceding sentence, work
co-operatively and use commercially reasonable efforts to prepare prior to the
Effective Time all documentation necessary and do all such other acts and things
as are necessary to give effect to such Pre-Acquisition Reorganization at least
two Business Days prior to the Effective Time, or such later time as may be
agreed to by the Acquiror. In addition:

 

  (A) if the Plan of Arrangement (or alternative transaction structure referred
to in Section 2.16) is not completed, Acquiror shall pay the implementation
costs of the Pre-Acquisition Reorganization and any direct or indirect costs and
liabilities of Certicom and its Subsidiaries, including employment costs, taxes
and liabilities as well as any costs, taxes and liabilities that may be incurred
to unwind any such Pre-Acquisition Reorganization (including actual
out-of-pocket costs and expenses for filing fees and external counsel);

 

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  (B) any Pre-Acquisition Reorganization or required cooperation of Certicom in
structuring, planning and implementing any Pre-Acquisition Reorganization shall
not unreasonably interfere in material operations prior to the Effective Time of
Certicom or any Subsidiary of Certicom (it being understood that any combination
of the business, operations or assets of Certicom or any of its Subsidiaries
with the business, operations or assets of one or more other Subsidiary of
Certicom by way of amalgamation, merger, winding-up or otherwise shall not be
considered to unreasonably interfere in material operations);

 

  (C) unless the Parties otherwise agree, any Pre-Acquisition Reorganization
shall not require any pre-approval from any Governmental Entity;

 

  (D) any Pre-Acquisition Reorganization shall not require Certicom or any
Subsidiary of Certicom to contravene any applicable Laws or any material
Contract; and

 

  (E) such cooperation does not require the directors, officers, employees or
agents of Certicom or its Subsidiaries to take any action in any capacity other
than as a director, officer or employee or agent, and the Acquiror shall
indemnify and save harmless such directors, officers, employees or agents from
and against any and all liabilities, taxes, losses, damages, claims, costs,
expenses, interest awards, judgments and penalties suffered or incurred by any
of them in connection with or as a result of implementing any Pre-Acquisition
Reorganization.

 

Acquiror acknowledges and agrees that the planning for and implementation of any
Pre-Acquisition Reorganization shall not be considered a breach of any covenant
under this Arrangement Agreement and shall not be considered in determining
whether a representation or warranty of Certicom hereunder has been breached.
Acquiror and Certicom shall work cooperatively and use reasonable commercial
efforts to prepare prior to the Effective Time all documentation necessary and
do such other acts and things as are necessary to give effect to such
Pre-Acquisition Reorganization; and

 

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  (f) except as prohibited by applicable Laws, promptly notify the Acquiror of:
(i) the occurrence of any matter or event that (A) is, or that is reasonably
likely to be, material, in an adverse manner, to the business, assets,
properties, financial condition or results of operations of Certicom and its
Subsidiaries, taken as a whole, or (B) has resulted, or is reasonably likely to
result, in (I) any representation and warranty of Certicom set forth in this
Arrangement Agreement becoming untrue or inaccurate such that the condition set
forth in Section 6.2(a) would not be satisfied or (II) any other condition to
the transactions contemplated hereby and set forth in Section 6.2 not being
satisfied; (ii) the failure of Certicom to perform any obligation to be
performed by it under this Arrangement Agreement such that the condition set
forth in Section 6.2(b) would not be satisfied; (iii) any notice or other
communication from any person (other than a Governmental Entity) alleging that
the consent of such person is required in connection with the Arrangement or any
of the other transactions contemplated by this Arrangement Agreement; (iv) any
notice or other communication from any Major Customer or Major Supplier to the
effect that such Major Customer or Major Supplier is terminating or otherwise
materially adversely modifying its relationship with Certicom or any of its
Subsidiaries as a result of the Arrangement or any of the other transactions
contemplated by this Arrangement Agreement; (v) any notice or other
communication from any Governmental Entity in connection with the Arrangement or
any of the other transactions contemplated in this Arrangement Agreement, and a
copy of any such notice or communication (if in written form) shall be promptly
furnished to the Acquiror; and (vi) any actions, suits, claims, investigations
or proceedings commenced or, to the knowledge of Certicom, threatened against,
relating to or involving or otherwise affecting Certicom or any of its
Subsidiaries that, if pending on the date of this Arrangement Agreement, would
have been required to have been disclosed pursuant to Section 3.1(g) or that
relate to the consummation of the Arrangement or any of the other transactions
contemplated by this Arrangement Agreement; provided, however, that, in each
case, no such notification shall affect the representations, warranties,
covenants, agreements or obligations of the Parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Arrangement Agreement.

 

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5.3 Covenants of the Acquiror Regarding the Performance of Obligations

 

The Acquiror shall, and the Acquiror shall cause its Subsidiaries to, perform
all obligations required or desirable to be performed by the Acquiror or any of
the Acquiror’s Subsidiaries under this Arrangement Agreement, co-operate with
Certicom in connection therewith, and do all such other acts and things as may
be necessary or desirable in order to consummate and make effective, as soon as
reasonably practicable, the transactions contemplated in this Arrangement
Agreement and, without limiting the generality of the foregoing, the Acquiror
shall and where appropriate shall cause its Subsidiaries to:

 

  (a) apply for and use all commercially reasonable efforts to obtain any
regulatory approvals relating to the Acquiror or any of the Acquiror’s
Subsidiaries which are required in order to consummate the Arrangement and, in
doing so, keep Certicom reasonably informed as to the status of the proceedings
related to obtaining such regulatory approvals, including providing Certicom
with copies of all related applications and notifications excluding any part
thereof constituting confidential information, in draft form, in order for
Certicom to provide its reasonable comments thereon; provided that for greater
certainty, nothing contained in this Arrangement Agreement shall restrict or
limit the Acquiror from making such commitments or providing such undertakings
or assuming such obligations as it considers, in its sole discretion, necessary
or desirable in order to obtain the regulatory approvals or any other sanctions,
rulings, consents, orders, exemptions, permits and other approvals required by
applicable antitrust or competition Law or (ii) shall require the Acquiror to
make any such commitments, provide any such undertakings or assume any such
obligations;

 

  (b) use all commercially reasonable efforts to assist Certicom in obtaining
all consents, waivers or approvals pursuant to Specified Contracts, provided
that the Acquiror shall not be obligated to pay any fees or guarantee any
obligations in connection with Certicom obtaining such consents, waivers or
approvals; and

 

  (c) defend all lawsuits or other legal, regulatory or other proceedings
against the Acquiror challenging or affecting this Arrangement Agreement or the
Arrangement.

 

5.4 Mutual Covenants

 

Each of the Parties covenants and agrees that, except as contemplated in this
Arrangement Agreement, during the period from the date of this Arrangement
Agreement until the earlier of the Effective Time and the time that this
Arrangement Agreement is terminated in accordance with its terms:

 

  (a)

it shall, and shall cause its Subsidiaries to, use all commercially reasonable
efforts to satisfy (or cause the satisfaction of) the conditions precedent to
its obligations hereunder as set forth in Article 6 to the extent the same is
within its control and to take, or cause to be taken, all other action and to
do, or cause to be done, all other things necessary, proper or advisable under
all applicable Laws to complete the transactions contemplated by this
Arrangement Agreement, including using its commercially reasonable efforts to:
(i) obtain all regulatory approvals required to be obtained by it; (ii) effect
all necessary registrations, filings and submissions of

 

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information requested by Governmental Entities required to be effected by it in
connection with the Arrangement; (iii) oppose, lift or rescind any injunction or
restraining order against it or other order or action against it seeking to
stop, or otherwise adversely affecting its ability to complete, the Arrangement;
and (iv) co-operate with the other Party in connection with the performance by
it and its Subsidiaries of their obligations hereunder;

 

  (b) it shall not take any action, or fail to take any commercially reasonable
action, or permit any of its Subsidiary to take any action or fail to take any
commercially reasonable action, which action or failure to take action (i) is
inconsistent with this Arrangement Agreement or (ii) would reasonably be
expected to significantly impede the completion of the Arrangement except as
permitted by this Arrangement Agreement;

 

  (c) it shall use commercially reasonable efforts to obtain all necessary
waivers, consents and approvals required to be obtained to consummate the
Arrangement in addition to those referred to in Sections 5.2 and 5.3; and

 

  (d) it shall use its commercially reasonable efforts to conduct its affairs so
that all of its representations and warranties contained herein qualified as to
materiality shall be true and correct and all of its representations and
warranties contained herein not so qualified shall be true and correct in all
material respects, in each case, on and as of the Effective Date as if made
thereon (other than the representations and warranties specific to a particular
date which shall remain true and correct in all material respects or in all
respects, as appropriate, as of that date).

 

ARTICLE 6

CONDITIONS

 

6.1 Conditions to Each Party’s Obligation to Effect the Arrangement

 

The respective obligation of each Party to effect the Arrangement is subject to
the satisfaction or waiver on or prior to the Effective Date of the following
conditions:

 

  (1) The Shareholder Approval shall have been obtained.

 

  (2) The Interim Order shall have been obtained in form and substance
satisfactory to each of the Parties hereto, acting reasonably, and shall not
have been set aside or modified in a manner unacceptable to such Parties, acting
reasonably, on appeal or otherwise.

 

  (3) The Final Order shall have been obtained in form and substance
satisfactory to the Parties hereto, acting reasonably, and shall not have been
set aside or modified in a manner unacceptable to such Parties, acting
reasonably, on appeal or otherwise.

 

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  (4) No temporary restraining order, preliminary or permanent injunction or
other Judgment issued by any court of competent jurisdiction or other legal
restraint or prohibition (collectively, “Legal Restraints”) that has the effect
of preventing the consummation of the Arrangement shall be in effect.

 

  (5) This Arrangement Agreement shall not have been terminated pursuant to
Article 8.

 

6.2 Additional Conditions Precedent to Obligations of the Acquiror

 

The obligations of the Acquiror are further subject to the satisfaction of the
following conditions or waiver on or before the Effective Date or such other
time prior thereto as is specified below:

 

  (1) The representations and warranties of Certicom contained herein that are
qualified by materiality or Material Adverse Effect qualifications shall be true
and correct (as so qualified), and the representations and warranties of
Certicom contained herein that are not so qualified shall be true and correct in
all material respects, in each case as of the date of this Arrangement Agreement
and as of the Effective Date with the same effect as though made as of the
Effective Date, except that the accuracy of representations and warranties that
by their terms speak as of a specified date will be determined as of such date,
and the Acquiror shall have received a certificate signed on behalf of Certicom
by the chief executive officer and chief financial officer of Certicom to such
effect.

 

  (2) Certicom shall have performed in all material respects all obligations
required to be performed by it under this Arrangement Agreement at or prior to
the Effective Date, and the Acquiror shall have received a certificate signed on
behalf of the Company by the chief executive officer and the chief financial
officer of the Company or other authorized senior officers to such effect.

 

  (3)

There shall not be pending any claim, suit, action or proceeding brought or
threatened in writing by any third party that has a reasonable likelihood of
success or by any Governmental Entity, (i) challenging or seeking to restrain or
prohibit the consummation of the Arrangement or the other transactions
contemplated by this Arrangement Agreement or seeking to obtain from the
Acquiror or any of its Subsidiaries any damages that are material, individually
or in the aggregate, in relation to the value of Certicom and its Subsidiaries,
taken as a whole as a consequence of the consummation of the Arrangement or the
other transactions contemplated by this Arrangement Agreement, (ii) seeking to
prohibit or limit in any respect, or place any conditions on, the ownership or
operation by Certicom, the Acquiror or all or any of their respective affiliates
of all or any portion of the business or assets or any product of Certicom or
its Subsidiaries or the Acquiror or its Subsidiaries or to require any such
person to dispose of, license (whether pursuant to an exclusive or nonexclusive
license) or hold separate all or any portion of the business or assets or any
product of Certicom or its Subsidiaries or the Acquiror or its Subsidiaries, in
each case as a result of or in connection with

 

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the consummation of the Arrangement or the other transactions contemplated by
this Arrangement Agreement, (iii) seeking to impose limitations on the ability
of the Acquiror or any of its affiliates to acquire or hold, or exercise full
rights of ownership of, any Certicom Shares or any shares in the capital of the
Acquiror, including the right to vote the Certicom Shares or the shares in the
capital of the Acquiror on all matters properly presented to the Certicom
Shareholders, or (iv) seeking to (A) prohibit the Acquiror or any of its
affiliates from effectively controlling in any respect any of the business or
operations of Certicom or its Subsidiaries or (B) prevent Certicom or its
Subsidiaries from operating any of their business in substantially the same
manner as operated by Certicom and its Subsidiaries prior to the date of this
Arrangement Agreement.

 

  (4) No Legal Restraint that is reasonably likely to result, directly or
indirectly, in any of the effects referred to in clauses (i) through (iv) of
Section 6.2(3) shall be in effect.

 

  (5) There shall not have occurred a Material Adverse Effect on or with respect
to Certicom that has not been publicly disclosed by Certicom prior to the date
hereof or disclosed to the Acquiror in writing prior to the date hereof, and
since the date of this Arrangement Agreement, there shall not have occurred a
Material Adverse Effect on or with respect to Certicom, and the Acquiror shall
have received a certificate signed on behalf of Certicom by the chief executive
officer and the chief financial officer of Certicom to such effect.

 

  (6) Dissent Rights shall not have been duly exercised in connection with the
Arrangement with respect to more than 10% of the Certicom Shares held by
Certicom Shareholders entitled to receive notice of and vote at the Special
Meeting in accordance with the Interim Order.

 

The foregoing conditions are for the benefit of the Acquiror and may be waived,
in whole or in part, by the Acquiror in writing at any time and, unless
otherwise provided in the written waiver, will be limited to the specific
condition waived. If any of such conditions shall not have been complied with or
waived by the Acquiror on or before the date required for their performance, the
Acquiror may terminate this Arrangement Agreement by written notice to Certicom.

 

6.3 Additional Conditions Precedent to the Obligations of Certicom

 

The obligations of Certicom hereunder are further subject to the satisfaction or
waiver of the following conditions on or before the Effective Date or such other
time prior thereto as is specified below:

 

  (1)

The representations and warranties made by the Acquiror in this Arrangement
Agreement shall be true and correct in all material respects as of the date
hereof and the Effective Date as if made on and as of such date (except to the
extent that such representations and warranties speak as of an earlier date or
except as affected by transactions contemplated or permitted by this Arrangement

 

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Agreement or except as would not have a material adverse effect on the
Acquiror’s ability to complete the transactions contemplated by this Arrangement
Agreement), and Certicom shall have received a certificate signed on behalf of
the Acquiror by an authorized signatory to such effect.

 

  (2) The Acquiror shall have performed in all material respects all obligations
required to be performed by it under this Arrangement Agreement at or prior to
the Effective Date, and Certicom shall have received a certificate signed on
behalf of the Acquiror by an authorized signatory to such effect.

 

  (3) Prior to the Effective Date, the Acquiror shall have deposited or cause to
be deposited with the Depository, for the benefit of the Certicom Shareholders
and Optionholders, cash in the amount equal to the aggregate amount of the Cash
proceeds per Share and Option Consideration payable to the Certicom Shareholders
and Optionholders pursuant to the Plan of Arrangement.

 

The foregoing conditions are for the benefit of Certicom and may be waived, in
whole or in part, by Certicom in writing at any time and, unless otherwise
provided in the written waiver, will be limited to the specific condition
waived. If any of such conditions shall not have been complied with or waived by
Certicom on or before the date required for their performance, Certicom may
terminate this Arrangement Agreement by written notice to the Acquiror.

 

6.4 Notice and Cure Provisions

 

Each Party will give prompt notice to the other of the occurrence, or failure to
occur, at any time from the date hereof until the earlier to occur of the
termination of this Arrangement Agreement and the Effective Time of any event or
state of facts which occurrence or failure would, or would be likely to:

 

  (a) cause any of the representations or warranties of either Party contained
herein qualified as to materiality to be untrue or inaccurate or any of those
not so qualified to be untrue or inaccurate in any material respect on the date
hereof or at the Effective Date; or

 

  (b) result in the failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by either Party hereunder prior to
the Effective Date.

 

No Party may elect not to complete the transactions contemplated hereby pursuant
to the conditions set forth herein or any termination right arising therefrom
under Section 8.2(1)(b) or Section 8.2(1)(c) and no payments are payable as a
result of such election pursuant to Section 7.4 unless, prior to the Effective
Date, the Party intending to rely thereon has delivered a written notice to the
other Party specifying in reasonable detail all breaches of covenants,
representations and warranties or other matters which the Party delivering such
notice is asserting as the basis for the non-fulfilment or the applicable
condition or termination right, as the case may be. If any such notice is
delivered, provided that a Party is proceeding diligently to cure such matter
and such matter is capable of being cured, no Party may terminate this
Arrangement Agreement until the expiration of a period of five Business Days
from such notice.

 

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6.5 Merger of Conditions

 

The conditions set out in Sections 6.1, 6.2 and 6.3 shall be conclusively deemed
to have been satisfied, waived or released upon the filing of the Articles of
Arrangement as contemplated by this Arrangement Agreement.

 

ARTICLE 7

ADDITIONAL AGREEMENTS

 

7.1 Non-Solicitation

 

  (1) Certicom shall not, directly or indirectly, through any officer, director,
employee, representative (including any financial or other advisor) or agent of
Certicom or any of its Subsidiaries, (i) make, solicit, initiate, assist,
encourage or otherwise facilitate (including by way of furnishing information or
entering into any form of agreement) the initiation of any inquiries or
proposals regarding, constituting or that may reasonably be expected to lead to,
an Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or provide any information with respect to, or otherwise co-operate
in any way with, any effort or attempt by any other person to make or complete
an Acquisition Proposal, (iii) withdraw or modify, or propose publicly to
withdraw or modify, in a manner adverse to the Acquiror, the approval or
recommendation of the Board or Special Committee of the Arrangement,
(iv) approve, recommend or remain neutral with respect to, or propose publicly
to approve, recommend or remain neutral with respect to, any Acquisition
Proposal (it being understood that publicly taking no position or a neutral
position with respect to an Acquisition Proposal until ten business days
following the public announcement of such Acquisition Proposal shall not be
considered a violation of this Section 7.1(1)) or (v) accept or enter into, or
propose publicly to accept or enter into, any letter of intent, agreement in
principle, agreement, arrangement or undertaking in respect of an Acquisition
Proposal; provided that nothing contained in this Arrangement Agreement shall
prevent the Board from considering, negotiating, accepting, approving,
recommending to Certicom Shareholders or entering into an agreement in respect
of a bona fide, written Acquisition Proposal received at any time prior to
obtaining Shareholder Approval, in each case solely in the manner and under the
circumstances set forth in this Section 7.1 or Section 7.2, as the case may be,
and in each case where the Acquisition Proposal in question:

 

  (a) did not result from a breach of any agreement between the person making
such Acquisition Proposal and Certicom or any of its Subsidiaries, or this
Section 7.1;

 

  (b) is not subject to a due diligence condition;

 

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  (c) involves not less than 66 2/3% of the outstanding Certicom Shares or all
or substantially all of the consolidated assets of Certicom; and

 

  (d) in respect of which the Board determines in its good faith judgment, after
consultation with its financial advisors and its outside counsel would, if
consummated in accordance with its terms, result in a transaction that: (A) is
reasonably capable of completion in accordance with its terms without undue
delay, taking into account all legal, financial, regulatory and other aspects of
such Acquisition Proposal and the person making such Acquisition Proposal;
(B) is more favourable from a financial point of view to Certicom Shareholders
than the Arrangement, and (C) is not subject to any financing condition and in
respect of which any required financing to complete such Superior Proposal has
been demonstrated to the satisfaction of the Board, acting in good faith (after
receipt of advice from its financial advisors and outside legal counsel), will
be obtained.

 

(any such Acquisition Proposal being referred to herein as a “Superior
Proposal”).

 

  (2) Certicom shall, and shall cause the officers, directors, employees,
representatives and agents of Certicom and its Subsidiaries to, immediately
terminate any existing discussions or negotiations with any parties (other than
the Acquiror) with respect to any proposal that constitutes, or may reasonably
be expected to constitute, an Acquisition Proposal. Certicom agrees not to
release any third party from, and shall enforce, any confidentiality agreement
relating to a potential Acquisition Proposal to which such third party is a
party. Certicom further agrees not to release any third party from, and shall
enforce, any standstill agreement or provision to which such third party is a
party. Certicom shall immediately request the return or destruction of all
information provided to any third party which, at any time since January 1,
2007, has entered into a confidentiality agreement with Certicom relating to a
potential Acquisition Proposal to the extent that such information has not
previously been returned or destroyed, and shall use all commercially reasonable
efforts to ensure that such requests are honoured.

 

  (3)

Certicom shall immediately (and in any event within 24 hours of receipt by
Certicom) notify the Acquiror of, at first orally and then in writing, of any
Acquisition Proposal or inquiry that could lead to an Acquisition Proposal, in
each case received after the date hereof of which any of its directors or
officers become aware, or any amendments to the foregoing, or any request for
non-public information relating to Certicom or any of its Subsidiaries in
connection with an Acquisition Proposal or for access to the properties, books
or records of Certicom or any of its Subsidiaries by any person that informs
Certicom or such Subsidiary that it is considering making, or has made, an
Acquisition Proposal and any amendment thereto and if in writing or electronic
form, a copy thereof, and if not in writing or electronic form, a description of
the material terms of any such Acquisition Proposal or inquiry, and shall
provide the identity of the person making any such Acquisition Proposal or
inquiry and such other details of the proposal or inquiry as the Acquiror may
reasonably request. Certicom shall keep

 

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the Acquiror fully informed of the status, including any change to the material
terms, of any such Acquisition Proposal or inquiry, and shall provide to the
Acquiror copies of all correspondence if in writing or electronic form, and if
not in writing or electronic form, a description of the material terms of such
correspondence sent to Certicom by or on behalf of any person making any such
Acquisition Proposal.

 

  (4) If, prior to the approval of the Arrangement Resolution by the Certicom
Shareholders, Certicom receives a request for material non-public information
from a person who proposes an unsolicited bona fide Acquisition Proposal that is
subject to a due diligence condition or due diligence access condition, and the
Board determines in good faith that such proposal would be, if consummated in
accordance with its terms and the due diligence or due diligence access
condition satisfied, a Superior Proposal, then, and only in such case, the Board
may, subject to the execution by such person of a non-disclosure and standstill
agreement having substantially the same terms as the Confidentiality Agreement
(including, for greater certainty, a standstill provision substantially
identical to that set forth in the Confidentiality Agreement), provide such
person with access in accordance with subsection (1) to information regarding
Certicom; provided, however that the person making the Acquisition Proposal
shall not be precluded thereunder from making the Acquisition Proposal, and
provided further that Certicom sends a copy of any such non-disclosure and
standstill agreement to the Acquiror immediately upon its execution and the
Acquiror is immediately provided with a list and copies of all information
provided to such person not previously provided to the Acquiror and is
immediately provided with access to information similar to that which was
provided to such person.

 

  (5) Certicom shall ensure that its officers and directors and those of its
Subsidiaries and any financial or other advisors or representatives retained by
it are aware of the provisions of this Section, and it shall be responsible for
any breach of this Section by any such person or its advisors or
representatives.

 

  (6) Subject to the rights of the Acquiror in Sections 7.1, 7.2 and 8.2,
nothing contained in this Arrangement Agreement shall prohibit the Board from
making any disclosure to Certicom Shareholders or from calling and holding a
meeting of Certicom Shareholders, or any of them, requisitioned by Certicom
Shareholders, or any of them, in each case prior to the Effective Date if
required under applicable Laws.

 

7.2 Right to Match

 

  (1) Subject to Section 7.2(2), Certicom covenants that it will not accept,
approve, recommend or enter into any agreement in respect of an Acquisition
Proposal (other than a non-disclosure and standstill agreement permitted by
Section 7.1(4)) nor withdraw, modify or qualify (or propose to withdraw, modify
or qualify) in any manner adverse to Acquiror the approval or recommendation of
the Arrangement, nor accept, approve or recommend any Acquisition Proposal
unless:

 

  (a) an Acquisition Proposal has been made that the Board determines in good
faith constitutes a Superior Proposal;

 

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  (b) Certicom has complied with its obligations under Section 7.1 and the other
provisions of this Article 7;

 

  (c) Certicom has provided Acquiror with a notice in writing that there is a
Superior Proposal together with all documentation comprising the Superior
Proposal, including any value (including a range of value, if any) in financial
terms that the Board has in consultation with its financial advisors determined
should be ascribed to any non-cash consideration offered under the Superior
Proposal;

 

  (d) a period (the “Response Period”) of five Business Days shall have elapsed
from the date on which the Acquiror received the entirety of the documentation
set forth in the prior paragraph, and, if Acquiror has proposed to amend the
terms of the Arrangement in accordance with Subsection 7.2(2), the Board shall
have determined, in good faith, after consultation with its financial advisors
and outside legal counsel, that the Acquisition Proposal is a Superior Proposal
compared to the terms of the Arrangement after giving effect to any offer to
amend the terms of the Arrangement made by the Acquiror in accordance with
Section 7.2(2);

 

  (e) Certicom terminates this Arrangement Agreement pursuant to
Section 8.2(1)(e); and

 

  (f) Certicom has previously, or concurrently will have, paid to the Acquiror
the Termination Fee.

 

  (2) During the Response Period, the Acquiror will have the right, but not the
obligation, to offer to amend the terms of the Arrangement, and Certicom shall
co-operate with the Acquiror with respect thereto, including negotiating in good
faith with the Acquiror to enable the Acquiror to make such adjustments to the
terms and conditions of this Arrangement Agreement and the Arrangement as the
Acquiror deems appropriate and as would enable the Acquiror to proceed with the
Arrangement and any related transactions on such adjusted terms. The Board will
review in good faith any such offer by the Acquiror to amend the terms of the
Arrangement, including an increase in, or modification of, the consideration to
be received by the Certicom Shareholders, to determine whether the Acquisition
Proposal to which the Acquiror is responding would be a Superior Proposal when
assessed against the Arrangement as the Acquiror has offered to amend it. If the
Board does not so determine, the Board will promptly reaffirm its recommendation
of the Arrangement and enter into an amended Arrangement Agreement with Acquiror
reflecting Acquiror’s offer to amend the terms of the Arrangement.

 

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  (3) If Certicom provides Acquiror with notice under Section 7.2(1) on a date
that is less than five Business Days before the date of the Special Meeting,
subject to applicable Laws, Certicom shall postpone or adjourn the Special
Meeting to a date that is at least five Business Days but not more than 10
Business Days after the scheduled date of the Special Meeting.

 

  (4) Each successive amendment to any Acquisition Proposal that results in an
increase in, or modification of, the consideration (or value of such
consideration) to be received by the holders of Certicom Shares shall constitute
a new Acquisition Proposal for the purposes of this Section 7.2 and the Acquiror
shall be afforded a new Response Period in respect of each such Acquisition
Proposal.

 

7.3 Agreement as to Damages

 

Notwithstanding any other provision relating to the payment of fees, including
the payment of brokerage fees, if after the execution of this Arrangement
Agreement the Arrangement is not consummated because:

 

  (a) the Acquiror shall have terminated this Arrangement Agreement pursuant to
Section 8.2(1)(d);

 

  (b) (i) a bona fide Acquisition Proposal shall have been made or proposed to
Certicom or to the Certicom Shareholders after the date hereof and prior to the
Special Meeting; (ii) this Arrangement Agreement is terminated pursuant to
Section 8.2(1)(a)(iii); and (iii) within 12 months of the date of this
Arrangement Agreement an Acquisition Proposal is completed (whether or not such
Acquisition Proposal is the same Acquisition Proposal referred to in clause
(i) above);

 

  (c) the Acquiror shall have terminated this Arrangement Agreement pursuant to
Section 8.2(1)(b) in the event of any willful or intentional breach by Certicom
of any of its obligations under this Arrangement Agreement; or

 

  (d) Certicom shall have terminated this Arrangement Agreement pursuant to
Section 8.2(1)(e),

 

then Certicom shall pay to the Acquiror, within two Business Days of the first
to occur of (a), (b) or (c) above (or, in the case of (d) contemporaneously or
prior to such termination), the amount of $4,000,000 (the “Termination Fee”) as
liquidated damages in immediately available funds to an account designated by
the Acquiror. For greater certainty, the Parties acknowledge that Certicom shall
not be obligated to make more than one payment pursuant to this Section 7.3.

 

Each Party acknowledges that the payment amount set out in this Section 7.3 is a
payment of liquidated damages which is a genuine pre-estimate of the damages
which the Acquiror will suffer or incur as a result of the event giving rise to
such damages and the resultant

 

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termination of this Arrangement Agreement and is not a penalty. Certicom
irrevocably waives any right it may have to raise as a defence that any such
liquidated damages are excessive or punitive. For greater certainty, the Parties
agree that, subject to Article 8, payment of the amount determined pursuant to
this Section 7.3 in the manner provided in respect thereof is the sole monetary
remedy of the Acquiror, provided however that payment by Certicom and acceptance
by Acquiror of the amounts required to be paid pursuant to Section 7.3 shall not
be in lieu of any damages or any other payment or remedy available in the event
of any willful or intentional breach by Certicom of any of its obligations under
this Arrangement Agreement.

 

7.4 Fees and Expenses

 

  (1) Subject to subsections (2), (3) and (4), each Party shall pay all fees,
costs and expenses incurred by such Party in connection with this Arrangement
Agreement and the Arrangement.

 

  (2) If this Arrangement Agreement is terminated by the Acquiror pursuant to
(i) Section 8.2(1)(a)(iii) or (ii) Section 8.2(1)(b) based on any condition
contained in Section 6.2(1) or (2) not having been satisfied or waived by the
Acquiror at or before the Effective Date, then (unless the Acquiror shall have
made a misrepresentation or breached a warranty or covenant under this
Arrangement Agreement in such a manner that Certicom would be entitled to rely
on the failure of a condition set forth in Section 6.3 as a reason not to
complete the Arrangement and terminate this Arrangement Agreement pursuant to
Section 8.2(1)(c)), Certicom shall pay the Acquiror $500,000 as reimbursement to
the Acquiror for its out-of-pocket expenses incurred in connection with the
transactions contemplated hereby.

 

  (3) If this Arrangement Agreement is terminated by Certicom pursuant to
Section 8.2(1)(c), then (unless Certicom shall have made a misrepresentation or
breached a warranty or covenant under this Arrangement Agreement in such a
manner that the Acquiror would be entitled to terminate this Arrangement
Agreement pursuant to Section 8.2(1)(b)), the Acquiror shall pay Certicom
$500,000 as reimbursement to Certicom for its out-of-pocket expenses incurred in
connection with the transactions contemplated hereby.

 

  (4) No fees shall be payable by Certicom under subsection (2) if Certicom has
paid the amount provided under Section 7.3.

 

  (5) The Acquiror shall be responsible for any filing fees made in support of
any filings made to a Governmental Entity in respect of the transactions
contemplated by this Arrangement Agreement.

 

  (6) Payments of any amounts under subsection (2) (in the case only of
terminations pursuant to Section 8.2(1)(b)), or subsection (3) shall not be
exclusive of any other remedies to which the parties may be entitled as a result
of the termination of this Arrangement Agreement.

 

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7.5 Injunctive Relief

 

Nothing contained herein shall preclude a Party from seeking injunctive relief
to restrain any breach or threatened breach of the covenants or agreements set
forth in this Arrangement Agreement or the Confidentiality Agreement or
otherwise to obtain specific performance of any of such acts, covenants or
agreements, without the necessity of posting a bond or security in connection
therewith.

 

7.6 Access to Information; Confidentiality

 

From the date hereof until the earlier of the Effective Time and the termination
of this Arrangement Agreement, Certicom shall, and shall cause its Subsidiaries
and their respective officers, directors, employees, independent auditors,
accounting advisers and agents to, afford to the Acquiror and to the officers,
employees, agents and representatives of the Acquiror such access as the
Acquiror may reasonably require at all reasonable times, including for the
purpose of facilitating integration business planning, to their officers,
employees, agents, properties, books, records and Contracts, and shall furnish
the Acquiror with all data and information as the Acquiror may reasonably
request. The Parties acknowledge and agree that information furnished pursuant
to this Section shall be subject to the terms and conditions of the
Confidentiality Agreement.

 

7.7 Insurance and Indemnification

 

  (1) The Acquiror shall, or in the alternative may request Certicom to,
purchase “run-off” directors’ and officers’ liability insurance for a period of
up to six years from the Effective Date, provided that the cost of such
insurance shall not exceed $125,000.

 

  (2) The Acquiror agrees that all rights to indemnification or exculpation now
existing in favour of present and former officers and directors of Certicom and
its Subsidiaries that are disclosed in Section 7.7 of the Disclosure Letter
shall survive the completion of the Arrangement and shall continue in full force
and effect for a period of not less than six years from the Effective Date.

 

7.8 Certain employee matters

 

Following the Effective Date, the Acquiror shall cause Certicom to make a bonus
payment to all employees and consultants of Certicom as at the date of this
Agreement in accordance with any Certicom’s annual incentive bonus plan and on a
basis consistent with Certicom’s past practice following the completion of the
fiscal year ending April 30, 2009; provided that any such employee or consultant
whose position or engagement, as the case may be, is terminated prior to the
payment of the time of payment of such bonuses shall receive at the time of
payment of such bonuses an amount that would have been determined in accordance
with the foregoing, pro-rated such that it is proportional to the duration of
the portion of such fiscal year that the employee has been employed or engaged,
as the case may be, without regard to any periods of notice that the individual
may have at Law or pursuant to any Contract.

 

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7.9 Termination of Certain Plans

 

Prior to the Closing Date, the Company shall take all actions necessary
(including without limitation, the required corporate actions) to terminate, in
accordance with all applicable Law, any and all tax qualified defined
contribution plans sponsored or maintained by the Company that are subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended,
provided that the Acquiror shall use commercially reasonable efforts to offer
those employees of the Company who will be employees of the Acquiror (including
for greater certainty its direct and indirect subsidiaries) immediately
following the Effective Time with the opportunity to participate in a
tax-qualified defined contribution plan sponsored by the Acquiror (including,
without limitation and subject to applicable Law, the ability of such employee
to rollover any account balance and plan loan outstanding as of the Effective
Time.

 

ARTICLE 8

TERM, TERMINATION, AMENDMENT AND WAIVER

 

8.1 Term

 

This Arrangement Agreement shall be effective from the date hereof until the
earlier of the Effective Time and the termination of this Arrangement Agreement
in accordance with its terms.

 

8.2 Termination

 

  (1) This Arrangement Agreement may:

 

  (a) be terminated either by the Acquiror or by Certicom if

 

  (i) any Law makes the making or completion of the Arrangement or the
transactions contemplated by this Arrangement Agreement illegal or otherwise
prohibited;

 

  (ii) the Arrangement shall not have been consummated by the Outside Date for
any reason; provided, however, that the right to terminate this Arrangement
Agreement under this Section 8.2(1)(a)(ii) shall not be available to any Party
whose action or failure to act has been a principal cause of or resulted in the
failure of the Arrangement to occur on or before such date and such action or
failure to act constitutes a breach of this Arrangement Agreement; or

 

  (iii) the Special Meeting shall have been held and the Shareholder Approval
shall not have been obtained thereat or at any adjournment or postponement
thereof;

 

  (b) subject to Section 6.4, be terminated by the Acquiror if the Acquiror is
not in material breach of its obligations under this Arrangement Agreement and
Certicom breaches any of its representations, warranties, covenants or
agreements contained in this Arrangement Agreement, which breach would give rise
to the failure of a condition set forth in Section 6.2;

 

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  (c) subject to Section 6.4, be terminated by Certicom if Certicom is not in
material breach of its obligations under this Arrangement Agreement and the
Acquiror breaches any of its representations, warranties, covenants or
agreements contained in this Arrangement Agreement, which breach would give rise
to the failure of a condition set forth in Section 6.3;

 

  (d) be terminated by Acquiror if, prior to the Effective Time, (i) the Board
or Special Committee shall have withdrawn, withheld, qualified or modified in a
manner adverse to Acquiror its recommendation of the Arrangement and this
Arrangement Agreement (it being understood that publicly taking a neutral
position or no position with respect to an Acquisition Proposal beyond a period
of ten calendar days after public announcement of an Acquisition Proposal shall
be considered an adverse modification), (ii) the Board or Special Committee
shall have approved or recommended any Acquisition Proposal; (iii) Certicom
shall have breached Section 7.1 in any material respect; or (iv) the Acquiror
requests that the Board reaffirm its recommendation of the Arrangement and this
Arrangement Agreement and the Certicom Board shall not have done so by the fifth
Business Day following receipt of such request; or

 

  (e) be terminated by Certicom in order to enter into a binding written
agreement with respect to a Superior Proposal (other than a non-disclosure and
standstill agreement permitted by Section 7.1(4)), subject to compliance with
Sections 7.1 and 7.2 in all material respects and provided that no termination
under this Section 8.2(1)(e) shall be effective unless and until Certicom shall
have paid to the Acquiror the amount required to be paid pursuant to
Section 7.3;

 

in each case, prior to the Effective Time unless stated otherwise.

 

  (2) If this Arrangement Agreement is terminated in accordance with the
foregoing provisions of this Section, this Arrangement Agreement shall forthwith
become void and of no further force or effect and no Party shall have any
further obligations hereunder except as provided in Sections 7.3, 7.4, 7.5
(including for greater certainty payment of the Termination Fee under any of the
circumstances specified in Section 7.3), 9.1, 9.2, 9.3, 9.6 and 9.7 and the
Confidentiality Agreement and as otherwise expressly contemplated hereby, and
provided that neither the termination of this Arrangement Agreement nor anything
contained in this Section 8.2 shall relieve any Party from any liability for any
breach by it of this Arrangement Agreement, including from any inaccuracy in its
representations and warranties and any non-performance by it of its covenants
made herein.

 

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8.3 Waiver

 

Any Party may (i) extend the time for the performance of any of the obligations
or acts of the other Party, (ii) waive compliance with any of the other Party’s
agreements or the fulfilment of any conditions to its own obligations contained
herein, or (iii) waive inaccuracies in any of the other Party’s representations
or warranties contained herein or in any document delivered by the other Party;
provided, however, that any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such Party and, unless
otherwise provided in the written waiver, will be limited to the specific breach
or condition waived.

 

ARTICLE 9

GENERAL PROVISIONS

 

9.1 Notices

 

All notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or e-mail
transmission, or as of the following Business Day if sent by prepaid overnight
courier, to the Parties at the following addresses (or at such other addresses
as shall be specified by either Party by notice to the other given in accordance
with these provisions):

 

  (1) if to the Acquiror:

 

487 E. Middlefield Road M/S MV2-2-1 Mountain View, California 94043 U.S.A.   
Attention:    Kevin Werner    Richard H. Goshorn Telephone:    (650) 961-7500
Facsimile:    (650) 426-5113 with a copy to: Osler, Hoskin & Harcourt LLP 620
8th Avenue 36th Floor New York, NY 10018 Attention:    Doug Bryce Telephone:   
(212) 867-5800 Facsimile:    (212) 867-5802 E-Mail:    dbryce@osler.com

 

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and a copy to: Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York,
NY 10006 Attention:    Christopher Austin Telephone:    (212) 225-2000
Facsimile:    (212) 225-3999

E-Mail:

   caustin@cgsh.com

 

  (2) if to Certicom:

 

Certicom Corp. 5520 Explorer Drive, 4th Floor Mississauga, Ontario L4W 5L1
Attention:    Karna Gupta Telephone:    1.905.507.4220 Facsimile:   
1.905.507.4230 E-Mail:    kgupta@certicom.com with a copy to: Blake, Cassels &
Graydon LLP Box 25, Commerce Court West 199 Bay Street Toronto, Ontario Canada
M5L 1A9 Attention:    Chris Hewat Telephone:    416.863.2761 Facsimile:   
416.863.2653 E-Mail:    chris.hewat@blakes.com

 

9.2 Miscellaneous

 

This Arrangement Agreement: (i) constitutes the entire agreement and supersedes
all other prior agreements, both written and oral, between the Parties with
respect to the subject-matter hereof save for the Confidentiality Agreement;
(ii) shall be binding upon and enure to the benefit of the Parties and their
respective successors and permitted assigns; and (iii) is not intended to confer
upon any other person any rights or remedies hereunder. The Parties shall be
entitled to rely upon delivery of an executed facsimile or similar electronic
copy of this Arrangement Agreement, and such facsimile or similar electronic
copy shall be legally effective to create a valid and binding agreement between
the Parties.

 

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9.3 Governing Law

 

This Arrangement Agreement shall be governed, including as to validity,
interpretation and effect, by the laws of the Province of Ontario and the laws
of Canada applicable therein, and shall be construed and treated in all respects
as an Ontario contract. Each of the Parties hereby irrevocably attorns to the
non-exclusive jurisdiction of the Courts of the Province of Ontario in respect
of all matters arising under and in relation to this Arrangement Agreement and
the Arrangement.

 

9.4 Injunctive Relief

 

The Parties agree that irreparable harm would occur in the event that any of the
provisions of this Arrangement Agreement were not performed in accordance with
their specific terms or were otherwise breached for which money damages would
not be an adequate remedy at law. It is accordingly agreed that the Parties
shall be entitled to an injunction or injunctions and other equitable relief to
prevent breaches of this Arrangement Agreement, any requirement for the securing
or posting of any bond in connection with the obtaining of any such injunctive
or other equitable relief hereby being waived.

 

9.5 Time of Essence

 

Time shall be of the essence in this Arrangement Agreement.

 

9.6 Binding Effect and Assignment

 

The Acquiror may assign all or any part of its rights under this Arrangement
Agreement to, and its obligations under this Arrangement Agreement may be
assumed by, a Subsidiary of the Acquiror, provided that if such assignment
and/or assumption takes place, the Acquiror shall continue to be liable jointly
and severally with such Subsidiary for all of its obligations hereunder. This
Arrangement Agreement shall be binding on and shall enure to the benefit of the
Parties and their respective successors and permitted assigns. No third party
shall have any rights hereunder. Except as expressly permitted by the terms
hereof, neither this Arrangement Agreement nor any of the rights, interests or
obligations hereunder may be assigned by either of the Parties without the prior
written consent of the other Party.

 

9.7 Severability

 

If any term or other provision of this Arrangement Agreement is invalid, illegal
or incapable of being enforced by any rule or Law or public policy, all other
conditions and provisions of this Arrangement Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Arrangement Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.

 

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9.8 Counterparts

 

This Arrangement Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF the Acquiror and Certicom have caused this Arrangement
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.

 

VERISIGN, INC By:  

Kevin A. Werner, SVP, Corporate Development & Strategy

By:  

/s/    Kevin A. Werner

CERTICOM CORP. By:  

/s/    J. Ian Giffen, Director

By:  

/s/    David Lewis, VP, General Counsel

 

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Exhibit A

 

To the Arrangement Agreement

 

ARRANGEMENT RESOLUTION

 

SPECIAL RESOLUTION OF THE SHAREHOLDERS OF

CERTICOM CORP.

 

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

 

1. The arrangement (the “Arrangement”) under section 192 of the Canada Business
Corporations Act (the “CBCA”) involving Certicom Corp. (the “Company”) and
VeriSign, Inc. (the “Acquiror”), as more particularly described and set forth in
the management information circular (the “Circular”) of the Company accompanying
the notice of this meeting (as the Arrangement may be modified or amended in
accordance with its terms) is hereby authorized, approved and adopted.

 

2. The plan of arrangement (the “Plan of Arrangement”) involving the Company,
the full text of which is set out as Exhibit C to the Arrangement Agreement made
as of January 23, 2009 between the Acquiror and the Company (the “Arrangement
Agreement”) (as the Plan of Arrangement may be modified or amended in accordance
with its terms) is hereby authorized, approved and adopted.

 

3. Notwithstanding that this resolution has been passed, and the Arrangement
adopted, by the holders of common shares of the Company (“Common Shares”) or
that the Arrangement has been approved by the Superior Court of Justice
(Ontario), the directors of the Company are hereby authorized and empowered
without further notice to or approval of the holders of Common Shares (i) to
amend the Arrangement Agreement or the Plan of Arrangement, to the extent
permitted by the Arrangement Agreement, and (ii) subject to the terms of the
Arrangement Agreement, not to proceed with the Arrangement.

 

4. Any officer or director of the Company is hereby authorized and directed for
and on behalf of the Company to execute, under the seal of the Company or
otherwise, and to deliver articles of arrangement and such other documents as
are necessary or desirable to the Director under the CBCA in accordance with the
Arrangement Agreement for filing.

 

5. Any officer or director of the Company is hereby authorized and directed for
and on behalf of the Company to execute or cause to be executed, under the seal
of the Company or otherwise, and to deliver or cause to be delivered, all such
other documents and instruments and to perform or cause to be performed all such
other acts and things as in such Person’s opinion may be necessary or desirable
to give full effect to the foregoing resolutions and the matters authorized
thereby, such determination to be conclusively evidenced by the execution and
delivery of such document or instrument or the doing of any such act or thing.

 

A-1

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Exhibit B

 

To the Arrangement Agreement

 

INTERIM ORDER

 

Court File No. 09 – CL - ·

 

Ontario

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

 

THE HONOURABLE     )           · DAY, THE     )   · DAY OF ·, 2009 JUSTICE ·    
)  

 

IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF THE CANADA BUSINESS
CORPORATIONS ACT, R.S.C. 1985, c. C-44, AS AMENDED, AND RULES 14.05(2) AND
14.05(3) OF THE RULES OF CIVIL PROCEDURE AND IN THE MATTER OF A PROPOSED PLAN OF
ARRANGEMENT OF CERTICOM CORP.

 

INTERIM ORDER

 

THIS MOTION, made by the Applicant Certicom Corp. (“Certicom”), for an interim
order (the “Interim Order”) for advice and directions of the Court in connection
with an application (the “Application”) to approve an arrangement under section
192 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended,
(the “CBCA”) was heard this day at 330 University Avenue, Toronto, Ontario.

 

ON READING the Notice of Application issued ·, 2009, the Notice of Motion dated
·, 2009, the affidavit of · sworn ·, 2009 (the “Affidavit”) and the exhibits
thereto, and on hearing the submissions of counsel for Certicom and counsel for
[Acquiror] (“[Acquiror]”) and on being advised that the Director appointed under
the CBCA (the “Director”) does not consider it necessary to appear.

 

Definitions

 

1. THIS COURT ORDERS that all capitalized terms not otherwise defined in this
Interim Order shall have the meanings ascribed thereto in the draft Management
Information Circular (the “Circular”) attached as Exhibit “A” to the Affidavit.

 

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The Meeting and Materials

 

2. THIS COURT ORDERS that Certicom is authorized and directed to call, hold and
conduct a special meeting (the “Meeting”) of the holders (the “Shareholders”) of
voting common shares in the capital of Certicom (the “Common Shares”) at which
the Shareholders will be asked to, among other things, consider and, if deemed
advisable, to approve, with or without variation, the Arrangement Resolution, a
copy of which is attached as Appendix “·” to the draft Circular, to, among other
things, authorize, approve and adopt the Arrangement and Plan of Arrangement.

 

3. THIS COURT ORDERS that the Meeting shall be called, held and conducted in
accordance with the notice of Meeting which forms part of the Circular (the
“Notice of Meeting”), the CBCA, the articles and the by-laws of Certicom
(including quorum requirements thereof) and the rulings and directions of the
Chair of the Meeting, subject to the terms of this Interim Order or any further
Order of this Honourable Court.

 

4. THIS COURT ORDERS that the only persons entitled to attend or speak at the
Meeting shall be: (a) the registered Shareholders as at the Record Date (·,
2009, as defined below) or their respective proxy holders; (b) the officers,
directors, auditors and advisors of Certicom; (c) representatives and advisors
of [Acquiror]; (d) the Director; and (e) other persons with the permission of
the Chair of the Meeting.

 

Distribution of Meeting Materials and Optionholder Materials

 

5. THIS COURT ORDERS that Certicom is hereby authorized to distribute the Notice
of Meeting, the Circular (which attaches the Notice of Application and this
Interim Order), the form of proxy (for registered Shareholders) and the letter
of transmittal, along with such amendments or additional documents as counsel
for Certicom may advise are necessary or desirable and are not inconsistent with
the terms of this Interim Order (collectively, the “Meeting Materials”), as
follows:

 

  (a) to registered Shareholders, by

 

  (i)

mailing same by pre-paid ordinary mail, delivery in person, by courier or
inter-office mail, to their last known address as they appear on the books

 

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and records of Certicom as of the Record Date (·, 2009) and if no address is
shown therein, then the last address of the person known to the Corporate
Secretary of Certicom, or

 

  (ii) by facsimile or electronic transmission to any Shareholder, who is
identified to the satisfaction of Certicom, who requests such transmission in
writing and, if required by Certicom, who is prepared to pay the charges for
such transmission,

 

not later than twenty-one (21) days prior to the date established for the
Meeting in the Notice of Meeting,

 

  (b) to non-registered Shareholders, by providing multiple copies of the
Meeting Materials to intermediaries and registered nominees, in accordance with
National Instrument 54-101 of the Canadian Securities Administrators, and in the
case of the form of proxy and letter of transmittal, as requested by
intermediaries or registered nominees,

 

  (c) to the directors and auditors of Certicom and to the Director, by mailing
by pre-paid ordinary mail, delivery in person, courier, inter-office mail,
electronic or facsimile transmission, not later than twenty-one (21) days prior
to the date established for the Meeting in the Notice of Meeting, and

 

  (d) the Toronto Stock Exchange by electronically filing the Meeting Materials
via the System for Electronic Document Analysis and Retrieval at least
twenty-one (21) days prior to the date established for the Meeting in the Notice
of Meeting,

 

and that compliance with this paragraph shall constitute sufficient notice of
the Meeting.

 

6. THIS COURT ORDERS that Certicom is hereby authorized to distribute the
Circular (which attaches the Notice of Application and this Interim Order) and
any other communications or documents determined by Certicom to be necessary or
desirable (collectively, the “Optionholder Materials”) to the holders of options
to purchase Common Shares (“Optionholders”), by pre-paid ordinary mail, delivery
in person, electronic or facsimile

 

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transmissions, courier or inter-office mail, concurrently with the distribution
described in paragraph 5 of this Interim Order. Distribution to such persons
shall be to their last known addresses as they appear on the books and records
of Certicom. The Optionholders are hereby made parties to this proceeding.

 

Updating Meeting Materials and Optionholder Materials

 

7. THIS COURT ORDERS that Certicom is hereby authorized to make such amendments,
updates, revisions or supplements to the Meeting Materials and Optionholder
Materials which are not inconsistent with the terms of this Interim Order as
Certicom may determine in accordance with the terms of the arrangement agreement
entered into between Certicom and the [Acquiror] including any amendments made
in accordance therewith (collectively, the “Arrangement Agreement”) (the
“Additional Information”), and that notice of such Additional Information may be
communicated to Shareholders and Optionholders by press release, newspaper
advertisement or one of the methods by which the Meeting Materials and
Optionholder Materials will be distributed as Certicom may determine
appropriate. Any amendments, updates or supplements to any of the Meeting
Materials, and any notice of any adjournment or postponement of the Meeting,
will be deemed to have been received by the Shareholders and Optionholders
within the times provided in paragraph 9 below.

 

Record Date

 

8. THIS COURT ORDERS that the record date (the “Record Date”) for determining
(i) the Shareholders entitled to receive the Meeting Materials and to vote at
the Meeting, and (ii) Optionholders entitled to receive the Optionholder
Materials shall, in each case, be 5:00 p.m. (Toronto time) on ·, 2009.

 

Deemed Receipt

 

9. THIS COURT ORDERS that the Meeting Materials and Optionholder Materials shall
be deemed for the purposes of this Interim Order to have been received,

 

  (a) in the case of mailing, three (3) days after delivery thereof to the post
office,

 

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  (b) in the case of delivery in person, upon receipt thereof at the intended
recipient’s address,

 

  (c) in the case of delivery by courier or by inter-office mail, one
(1) Business Day after receipt by the courier or inter-office system,

 

  (d) in the case of distribution by facsimile transmission, upon obtaining a
delivery receipt confirming the transmission thereof,

 

  (e) in the case of distribution by electronic transmission, upon the sending
thereof,

 

  (f) in the case of press release, at the time of dissemination of the press
release,

 

  (g) in the case of newspaper advertisement, at the time of publication of the
newspaper advertisement, and

 

  (h) in all such cases leave is granted for service outside Ontario to the
extent such leave is required.

 

For the purposes of this Interim Order, “Business Day” shall mean any day, other
than a Saturday, a Sunday and a statutory holiday in Toronto, Ontario, Canada or
New York, N.Y., Unites States of America.

 

10. THIS COURT ORDERS that distribution of the Meeting Materials and
Optionholder Materials pursuant to paragraphs 5 and 6 of this Interim Order
shall constitute good and sufficient service and notice thereof upon all such
persons of the Meeting and the within Application. Further, no other form of
service of the Meeting Materials or the Optionholder Materials or any portion
thereof need be made, or notice given or other material served in respect of
these proceedings, the within Application, and/or the Meeting to the persons
described in paragraphs 5 and 6 of this Interim Order or to any other persons.

 

11. THIS COURT ORDERS that the accidental failure or omission by Certicom to
give notice of the Meeting or to distribute the Meeting Materials or
Optionholder Materials due to mistake or events beyond the control of Certicom,
or the non-receipt of such notice or materials, shall not invalidate any
resolution passed or proceedings taken at the Meeting and shall not

 

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constitute a breach of this Interim Order, but if any such failure or omission
is brought to the attention of Certicom, then Certicom shall use its best
efforts to rectify it by the method and in the time most reasonably practicable
in the circumstances.

 

Amendments

 

12. THIS COURT ORDERS that Certicom is authorized, in the manner contemplated by
the Arrangement Agreement, to make such amendments, revisions and/or supplements
to the Arrangement and Plan of Arrangement as it may determine are appropriate,
without any additional notice to the Shareholders, the Optionholders, or any
other person, and the Arrangement and the Plan of Arrangement as so amended,
revised and/or supplemented, shall be the Arrangement and Plan of Arrangement
submitted to the Shareholders at the Meeting and shall be the subject of the
Arrangement Resolution. If such amendment, modification or supplement is made
following the Meeting it shall be subject to approval by this Honourable Court
at the hearing for the Final Order.

 

Adjournments and Postponements

 

13. THIS COURT ORDERS that Certicom, if it deems advisable and subject to the
terms of the Arrangement Agreement, is specifically authorized to adjourn or
postpone the Meeting on one or more occasions, without the necessity of first
convening the Meeting or first obtaining any vote of Shareholders respecting the
adjournment or postponement. Notice of any such adjournment or postponement
shall be given by press release, newspaper advertisement or by such method as
Certicom deems appropriate in the circumstances. This provision shall not limit
the authority of the Chair of the Meeting in respect of adjournments.

 

Proxies

 

14. THIS COURT ORDERS that Certicom is authorized to use the form of proxy in
substantially the same form attached as Exhibit “·” to the Affidavit, with such
amendments as counsel for Certicom may determine are necessary or desirable,
provided that such amendments and additional information are not inconsistent
with the terms of this Interim Order. Certicom is authorized, at its expense, to
solicit proxies, directly and through its officers, directors and employees, and
through such agents or representatives as it may retain for this purpose, and by
mail or such other forms of personal or electronic communication as it may
determine, subject to the terms of the Arrangement Agreement.

 

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15. THIS COURT ORDERS that the procedures for Shareholders to revoke proxies and
to use proxies at the Meeting shall be as set out in the Circular, including
that proxies must be received by Certicom no later than 48 hours, excluding
Saturdays, Sundays and holidays, prior to the start of the Meeting or any
adjournment of the Meeting. Certicom may in its discretion waive generally the
time limits for the deposit of proxies by Shareholders, if Certicom deems it
advisable to do so, subject to the terms of the Arrangement Agreement.

 

Voting

 

16. THIS COURT ORDERS that the only persons entitled to vote in person or by
proxy on the Arrangement Resolution shall be the registered Shareholders as at
the close of business on the Record Date.

 

17. THIS COURT ORDERS that, subject to further Order of this Honourable Court,
the vote required to pass and approve the Arrangement Resolution shall be the
affirmative vote of at least 66  2/3% of the votes cast on the Arrangement
Resolution by Shareholders present in person or represented by proxy at the
Meeting. Such vote shall be sufficient to authorize and direct Certicom to do
all such acts and things as may be necessary or desirable to give effect to the
Arrangement and the Plan of Arrangement on a basis consistent with that provided
for in the Circular without the necessity of any further approval by the
Shareholders, subject only to final approval of the Plan of Arrangement by this
Honourable Court.

 

18. THIS COURT ORDERS that in respect of the vote on the Arrangement Resolution
and in respect of matters properly brought before the Meeting pertaining to
items of business affecting Certicom (other than in respect of the Arrangement
Resolution), each Shareholder is entitled to one vote for each Common Share
held. Illegible votes, spoiled votes, defective votes and abstentions shall be
deemed not to be votes cast. Proxies that are properly signed and dated but that
do not contain voting instructions shall be voted in favour of the Arrangement
Resolution.

 

B-7

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Rights of Dissent

 

19. THIS COURT ORDERS that:

 

  (a) each registered Shareholder as of the Record Date, and

 

  (b) each non-registered Shareholder as of the Record Date who becomes a
registered Shareholder as of the Dissent Deadline (defined below), and

 

  (c) each holder of Options as of the Record Date who (i) exercises their
Options prior to the Dissent Deadline (defined below), and (ii) is a registered
Shareholder as of the Dissent Deadline (defined below),

 

shall be entitled to exercise rights of dissent in connection with the
Arrangement Resolution in accordance with section 190 of the CBCA, as modified
by the terms of the Plan of Arrangement and this Interim Order, including that:

 

  (a) notwithstanding subsection 190(5) of the CBCA, the written objection to
the Arrangement Resolution referred to in subsection 190(5) of the CBCA must be
received by Certicom as set out in the Circular by no later than 5:00 p.m.
(Toronto time) on the Business Day that is two Business Days prior to the date
of the Meeting (or any adjournment or postponement thereof) (the “Dissent
Deadline”),

 

  (b) notwithstanding section 190 of the CBCA, if the Arrangement is completed,
[Acquiror] shall be required to offer to pay fair value as of the day prior to
approval of the Arrangement Resolution, to Shareholders who duly exercise rights
of dissent, and to pay the amount to which such holders may be entitled pursuant
to the terms of the Plan of Arrangement, and

 

  (c) the “court” referred to in section 190 of the CBCA means this Honourable
Court.

 

20. THIS COURT ORDERS that registered Shareholders who duly exercise such rights
of dissent set out in paragraph 19 above and who:

 

  (a)

are determined to be entitled to be paid fair value for their Common Shares,
shall be deemed to have transferred their Common Shares to [Acquiror] as of the

 

B-8

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Effective Time without any further act or formality and free and clear of all
hypothecs, mortgages, liens, charges, security interests, encumbrances,
restrictions, adverse claims or other claims of third parties of any kind, for
cancellation in consideration for a payment of cash from [Acquiror] equal to
such fair value, or

 

  (b) are not entitled, for any reason, to be paid fair value for their Common
Shares pursuant to the exercise of the right of dissent, shall be deemed to have
participated in the Plan of Arrangement on the same basis and at the same time
as any non-dissenting registered Shareholder,

 

but in no case shall Certicom or [Acquiror] or any other person or entity be
required to recognize such dissenting Shareholders as holders of Common Shares
at or after the Effective Time, and the names of such dissenting Shareholders
shall be deleted from the registers of the Shareholders at the Effective Time.

 

Approval of Arrangement

 

21. THIS COURT ORDERS that upon approval by the Shareholders of the Arrangement
Resolution in the manner set forth in this Interim Order, Certicom may apply to
this Honourable Court for the Final Order approving this Arrangement on or about
·, 2009.

 

22. THIS COURT ORDERS that, subject to further order of this Honourable Court,
the only persons entitled to notice of any further proceedings herein, including
any hearing to consider and if deemed advisable to approve the Arrangement
(including any adjournments thereof), and to appear and to be heard thereon,
shall be (a) solicitors for Certicom, (b) solicitors for [Acquiror], (c) the
Director, and (d) persons who have delivered a Notice of Appearance herein in
accordance with this Interim Order.

 

Variance

 

23. THIS COURT ORDERS that Certicom shall be entitled, at any time, to seek
leave to vary this Interim Order.

 

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Precedence

 

24. THIS COURT ORDERS that, to the extent of any inconsistency or discrepancy
between the matters provided for in this Interim Order and the terms of any
instrument creating, governing or collateral to the Common Shares or Options or
the articles or by-laws of Certicom, this Interim Order shall govern.

 

Service and Filing

 

25. THIS COURT ORDERS that the time for service of the Notice of Motion and
Motion Record be and is hereby abridged and that the Notice of Motion is
properly returnable today and that service of the Notice of Motion and Motion
Record on any of the Shareholders or Optionholders or any other interested
person is hereby dispensed with.

 

26. THIS COURT ORDERS that any materials to be filed by Certicom in support of
the within Application for final approval of the Arrangement may be filed up to
one day prior to the hearing of the Application without further order of this
Honourable Court.

 

27. THIS COURT ORDERS that a Notice of Appearance together with any materials
that a person intends to rely upon must be served on Certicom’s solicitors as
soon as reasonably practicable, and, in any event, not less than five
(5) Business Days before the hearing of the Application. Service of any such
Notice of Appearance and materials shall be made on Certicom’s solicitors, ·,
Attention: ·, with a copy to solicitors for [Acquiror] at the following address:
·, Attention: ·.

 

Extra-Territorial Assistance

 

28. THIS COURT seeks and requests the aid and recognition of any court or any
judicial, regulatory or administrative body in any Province or Territory of
Canada and any judicial, regulatory or administrative tribunal or other court
constituted pursuant to the Parliament of Canada or the legislature of any
province and any court or any judicial, regulatory or administrative body of the
United Sates to act in aid of and to assist this Honourable court in carrying
out the terms of this Interim Order.

 

 

 

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Exhibit C

 

To the Arrangement Agreement

 

PLAN OF ARRANGEMENT

 

PLAN OF ARRANGEMENT

UNDER SECTION 192 OF THE

CANADA BUSINESS CORPORATIONS ACT

 

ARTICLE 1

DEFINITIONS AND INTERPRETATION

 

1.1 Definitions

 

In this Plan of Arrangement, unless there is something in the subject matter or
context inconsistent therewith, the following terms shall have the respective
meanings set out below and grammatical variations of such terms shall have
corresponding meanings:

 

“Acquiror” means VeriSign, Inc., a corporation incorporated under the laws of
the State of Delaware;

 

“Arrangement” means an arrangement under the provisions of Section 192 of the
CBCA on the terms and conditions set forth in this Plan of Arrangement, subject
to any amendment or modification thereto made in accordance with the terms of
the Arrangement Agreement and this Plan of Arrangement, or made at the direction
of the Court in the Final Order (with the consent of the Company and the
Acquiror, each acting reasonably);

 

“Arrangement Agreement” means the arrangement agreement made as of the 23rd day
of January, 2009 between the Company and the Acquiror, as same may be amended,
supplemented or restated in accordance with its terms providing for, among other
things, the Arrangement;

 

“Arrangement Resolution” means the special resolution of the Shareholders,
approving the Arrangement, such resolution to be in substantially the form of
Exhibit A attached to the Arrangement Agreement;

 

“Articles of Arrangement” means the articles of arrangement of the Company in
respect of the Arrangement, to be filed with the Director after the Final Order
is made;

 

“Business Day” means any day, other than a Saturday, a Sunday and a statutory
holiday in Toronto, Ontario, Canada or New York, N.Y., United States of America;

 

“Cash Proceeds per Share” shall mean $2.10 cash, subject to adjustment in
accordance with Section 2.6;

 

“CBCA” means the Canada Business Corporations Act and the regulations made
thereunder, as promulgated or amended from time to time;

 

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“Certificate” means the certificate or other confirmation of filing giving
effect to the Arrangement to be issued by the Director pursuant to section
192(7) of the CBCA after the Articles of Arrangement have been filed;

 

“Charter Documents” means articles and by-laws and similar constating documents
of the Company;

 

“Company” means Certicom Corp., a corporation continued under the CBCA;

 

“Court” means the Ontario Superior Court of Justice (Commercial List);

 

“Depository” means Computershare Trust Company of Canada at its principal office
in Toronto, Ontario;

 

“Director” means the Director appointed pursuant to Section 260 of the CBCA;

 

“Dissent Rights” shall have the meaning ascribed thereto in Section 3.1(a);

 

“Dissenting Shareholder” means a Shareholder who has properly and validly
dissented in respect of the Arrangement Resolution in strict compliance with the
Dissent Rights, who has not withdrawn or been deemed to have withdrawn such
dissent and who is ultimately determined to be entitled to be paid the fair
value of its Shares, but only in respect of the Shares in respect of which
Dissent Rights are validly exercised by such Shareholder;

 

“Effective Date” means the date upon which the Arrangement becomes effective as
established by the date of issue shown on the Certificate;

 

“Effective Time” means the first moment in time in Toronto on the Effective
Date;

 

“Final Order” means the order of the Court approving the Arrangement as such
order may be amended by the Court (with the consent of the Company and the
Acquiror, each acting reasonably) at any time prior to the Effective Date or, if
appealed, then unless such appeal is withdrawn or denied, as affirmed or amended
(provided that any such amendment shall be acceptable to the Acquiror and the
Company, each acting reasonably) on appeal;

 

“Governmental Entity” means any (a) multinational, federal, provincial,
territorial, state, municipal, local or other governmental or public department,
central bank, court, commission, commissioner (including the Commissioner of
Competition appointed pursuant to the Competition Act (Canada)), tribunal
(including the Competition Tribunal established under the Competition Tribunal
Act (Canada)), board, bureau, agency or instrumentality, domestic or foreign,
(b) any subdivision or authority of any of the foregoing, (c) any
quasi-governmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the above, or (d) stock
exchange, automated quotation system, self regulatory authority or securities
regulatory authority, including, without limitation, the TSX;

 

“Interim Order” means the interim order of the Court, as the same may be amended
by the Court (with the consent of the Company and the Acquiror, each acting
reasonably), made in connection with the Arrangement following the application
therefor contemplated by the Arrangement Agreement;

 

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“Law” means any federal, state, provincial or local, domestic or foreign,
statute, law, code, ordinance, rule or regulation of any Governmental Entity;

 

“Letter of Transmittal” means a letter of transmittal to be forwarded or made
available by the Company to Shareholders, in a form acceptable to the Acquiror,
acting reasonably, for use by such Shareholders in connection with the
Arrangement as contemplated herein;

 

“Liens” means any pledges, claims, liens, charges, options, hypothecs,
mortgages, security interests, restrictions, adverse rights or any other
encumbrances of any kind or nature whatsoever;

 

“Notice of Dissent” means a written notice provided by a Shareholder to the
Company setting forth such Shareholder’s objection to the Arrangement Resolution
and exercise of Dissent Rights;

 

“Option Consideration” means the aggregate cash payable by the Company pursuant
to Section 2.2(3);

 

“Optionholders” means the holders of Options;

 

“Options” means any existing right or option to purchase Shares outstanding
under the Stock Option Plans;

 

“Person” includes an individual, limited or general partnership, limited
liability company, limited liability partnership, joint venture, association,
body corporate, unincorporated organization, trustee, executor, administrator,
legal representative, government (including any Governmental Entity) or any
other entity, whether or not having legal status;

 

“Plan of Arrangement” means this plan of arrangement, and references to
“Article” or “Section” mean the specified Article or Section of this Plan of
Arrangement;

 

“Proxy Circular” means the management information circular of the Company dated
·, 2009 sent to Shareholders in connection with the Special Meeting, including
the schedules and appendices thereto and all amendments, revisions, supplements
and updates from time to time made thereto;

 

“Purchase Price” shall have the meaning ascribed thereto in Section 2.4;

 

“Shareholder Rights Plan” means the Shareholder Rights Plan Agreement adopted on
September 22, 1997 and amended and restated on October 8, 2003 and ratified and
reconfirmed as of September 21, 2006 between the Company and Computershare Trust
Company of Canada, as amended from time to time;

 

“Shareholders” means, at any time and unless the context otherwise requires, the
registered holders of Shares at such time;

 

“Shares” means the issued and outstanding common shares in the capital of the
Company (including common shares issued upon the exercise of Options) and shall
include any shares into which the Shares may be reclassified, subdivided,
consolidated or converted and any rights or benefits arising therefrom including
any extraordinary distribution of securities which may be declared in respect of
the Shares (except in accordance with this Plan of Arrangement);

 

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“Special Meeting” means the special meeting of the Shareholders (including any
adjournments or postponements thereof) to be held to consider, among other
things, the Arrangement Resolution;

 

“SRP Rights” means the rights issued pursuant to the Shareholder Rights Plan;

 

“Stock Option Plans” means the 1997 Stock Option Plan, as amended as of
October 19, 2000 and September 20, 2007, of Certicom, the March 25, 2000 U.S.
Stock Option Plan, as amended as of September 20, 2007, of Certicom, and the
2000 Directors’ Incentive Plan of Certicom, collectively; and

 

“TSX” means Toronto Stock Exchange.

 

1.2 Number and Gender

 

In this Plan of Arrangement, unless the context otherwise requires, words
importing the singular number include the plural and vice versa, and words
importing any gender include all genders.

 

1.3 Interpretation Not Affected by Headings, etc.

 

The division of this Plan of Arrangement into Articles, Sections and other parts
and the insertion of headings are for convenience only and shall not affect the
construction or interpretation of this Plan of Arrangement.

 

1.4 Time

 

All times expressed herein or in any Letter of Transmittal are local time
(Toronto, Ontario) unless otherwise stipulated herein or therein.

 

1.5 Currency

 

All references to currency in this Plan of Arrangement are to Canadian dollars,
being lawful money of Canada, unless otherwise specified.

 

1.6 Statutory References

 

Unless otherwise expressly provided herein, any reference in this Plan of
Arrangement to a statute includes all regulations made thereunder, all
amendments to such statute or regulations in force from time to time, and any
statute or regulation that supplements or supersedes such statute or
regulations.

 

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ARTICLE 2

THE ARRANGEMENT

 

2.1 Effectiveness

 

Subject to the terms of the Arrangement Agreement, this Plan of Arrangement will
become effective at the Effective Time (except as otherwise provided herein) and
will be binding from and after the Effective Time on: (i) the Company; (ii) the
Acquiror; (iii) all holders and all beneficial owners of Shares; (iv) all
holders and all beneficial owners of Options; (v) the registrar and transfer
agent in respect of the Shares; and (vi) the Depository.

 

2.2 The Arrangement

 

On the Effective Date and commencing at the Effective Time, the following shall
occur and be deemed to occur in the following order without further act or
formality:

 

  (1) notwithstanding the terms of the Shareholder Rights Plan, the Shareholder
Rights Plan shall be terminated and all SRP Rights shall be cancelled without
any payment in respect thereof;

 

  (2) each Share in respect of which Dissent Rights have been validly exercised
before the Effective Time shall be transferred and deemed to be transferred by
the holder thereof, without any further act or formality on its part, free and
clear of all Liens, to the Acquiror in consideration for a debt claim against
the Acquiror in an amount determined and payable in accordance with Article 3,
and the name of such holder will be removed from the register of holders of
Shares (in respect of the Shares for which Dissent Rights have been validly
exercised before the Effective Time), and the Acquiror shall be recorded as the
registered holder of Shares so transferred and shall be deemed to be the legal
and beneficial owner of such Shares free and clear of any Liens;

 

  (3) all of the Options granted and outstanding and exercisable to acquire
Shares immediately prior to the Effective Time shall, without any further action
on behalf of any Optionholder and without any payment except as provided in this
Plan of Arrangement, be disposed of and surrendered by the holders thereof to
the Company without any act or formality on its or their part in exchange for a
cash amount equal to the excess, if any, of (i) the product of the number of
Shares underlying such Options held by such holder and the Cash Proceeds per
Share over (ii) the aggregate exercise price payable under such Options by the
holder to acquire the Shares underlying such Options. All Options issued and
outstanding immediately prior to the Effective Time shall thereafter immediately
be cancelled;

 

  (4) notwithstanding the terms of the Stock Option Plans, the Stock Option
Plans shall be terminated; and

 

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  (5) each Share outstanding immediately prior to the Effective Time (including
any Share issued upon the effective exercise of Options prior to the Effective
Date), other than Shares held by the Acquiror and its affiliates, and other than
Shares held (or previously held) by a Dissenting Shareholder, shall be
transferred and deemed to be transferred by the holder thereof, without any
further act or formality on its part, free and clear of all Liens, to the
Acquiror in exchange for a payment in cash equal to the Cash Proceeds per Share,
and the name of such holder will be removed from the register of holders of
Shares and the Acquiror shall be recorded as the registered holder of Shares so
transferred and shall be deemed to be the legal and beneficial owner thereof,
free and clear of any Liens, and such payment shall be made upon the
presentation and surrender by or on behalf of the holder to the Depository
(acting on behalf of the Acquiror) of the certificate formerly representing
Shares and a Letter of Transmittal as more fully described in Section 2.3.

 

2.3 Letter of Transmittal

 

At the time of mailing the Proxy Circular or as soon as practicable after the
Effective Date, the Company shall forward to each Shareholder and Optionholder
at the address of such holder as it appears on the register maintained by or on
behalf of the Company in respect of the holders of Shares or Options, as the
case may be, the Letter of Transmittal in the case of holders of Shares and
instructions for obtaining delivery of that portion of the Purchase Price or the
Option Consideration, as the case may be, payable to such holder following the
Effective Date pursuant to this Plan of Arrangement.

 

2.4 Delivery of Purchase Price and Option Consideration

 

Prior to the Effective Date, (i) the Acquiror shall deposit, or arrange to be
deposited, the money required for the payment of the aggregate Cash Proceeds per
Share (the “Purchase Price”) for the Shares acquired pursuant to Section 2.2(5)
for the benefit of and in trust for the holders of Shares entitled to receive
Cash Proceeds per Share for each Share held by them in a special account with
the Depository to be paid to or to the order of the respective former holders of
such Shares without interest, and (ii) the Company shall deposit the money
required for the payment of the aggregate Option Consideration for the Options
which are acquired by the Company for cash pursuant to Section 2.2(3) for the
benefit of and in trust for the holders of such Options in a special account
with the Depository to be paid to or to the order of the respective former
holders of such Options without interest. All such money shall be cash,
denominated in Canadian dollars in same day funds payable at Toronto, Ontario.
Such money shall not be used for any purpose except as provided in this Plan of
Arrangement. Such payment to or to the order of the aforesaid former holders
shall be made on presentation and surrender at the principal office of the
Depository in the City of Toronto of, in the case of Shares, the certificate(s)
representing the Shares which were acquired by the Acquiror pursuant to
Section 2.2(5), and a duly completed Letter of Transmittal and such other
documents and instruments, if any, as the Acquiror and/or the Depository may
reasonably require. Upon surrender to the Depository for transfer to the
Acquiror of, in the case of a Shareholder, a

 

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certificate which immediately prior to the Effective Time represented Shares in
respect of which the holder is entitled to receive cash under the Arrangement,
and a duly completed Letter of Transmittal, and such other documents and
instruments as would have been required to effect the transfer of the Shares
formerly represented by such certificate under the CBCA and the by-laws of the
Company and such additional documents and instruments as the Acquiror and the
Depository may reasonably require, such former holder shall be entitled to
receive in exchange therefor, and as soon as practicable after the Effective
Time the Depository shall deliver to such holder, by cheque (or, if required by
applicable laws, a wire transfer) for the amount of cash such holder is entitled
to receive under the Arrangement (together, if applicable, with any unpaid
dividends or distributions declared on the Shares, if any, prior to the
Effective Time). In the event of a transfer of ownership of Shares that was not
registered in the securities register of the Company, the amount of cash payable
for such Shares under the Arrangement may be delivered to the transferee if the
certificate representing such Shares is presented to the Depository as provided
above, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable share transfer taxes have been
paid. As soon as practicable after the Effective Time, the Depositary shall
deliver on behalf of the Company to each Optionholder, as reflected on the books
and records of the Company, a cheque (or, if required by applicable laws, a wire
transfer) for the amount of cash such Optionholder is entitled to receive under
the Arrangement in accordance with Section 2.2(3). Thereafter, the Acquiror and
the Company shall be fully and completely discharged from their obligation to
pay the Purchase Price to the former holders of such Shares and the aggregate
Option Consideration to former holders of Options referred to in Section 2.2(5)
and 2.2(3), respectively, and the rights of such holders shall be limited to
receiving, without interest, from the Depository their proportionate part of the
money so deposited on, in case of Shareholders, presentation and surrender of
the documentation specified above. Any interest on such deposit shall belong to
the Acquiror.

 

2.5 Expiration of Rights

 

Any amounts deposited with the Depository for the payment of the Purchase Price
or the aggregate Option Consideration which remain unclaimed on the date which
is six years from the Effective Date shall be forfeited to the Acquiror and paid
over to or as directed by the Acquiror and the former holders of Shares and/or
Options shall thereafter have no right to receive their respective entitlement
to the Purchase Price or the aggregate Option Consideration, as applicable.

 

2.6 Dividends and Distributions

 

If the Company declares, sets aside or pays any dividend on, or makes any other
actual, constructive or deemed distribution in respect of any of the Shares, or
otherwise makes any payments to the holders of the Shares in their capacity as
such, during the period commencing on the date of the Arrangement Agreement and
ending on the Effective Date, the Acquiror may reduce the amount of the Cash
Proceeds per Share by any amount it determines in its sole discretion, provided
that such discount shall not exceed the amount of such dividend, distribution or
payment received per Share. No dividend or other distribution declared or made
after the Effective Time with respect to

 

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the Shares with a record date after the Effective Time shall be delivered to the
holder of any unsurrendered certificate which, immediately prior to the
Effective Time, represented outstanding Shares.

 

2.7 Transfers Free and Clear

 

Any transfer of securities pursuant to this Plan of Arrangement shall be free
and clear of any Liens.

 

ARTICLE 3

RIGHTS OF DISSENT

 

3.1 Dissent Rights

 

  (1) Each Shareholder may exercise rights of dissent with respect to its Shares
pursuant to and in the manner set forth in section 190 of the CBCA as modified
by the Interim Order and this Section 3.1 (the “Dissent Rights”); provided that
a Notice of Dissent is received by the Company by no later than 5:00 p.m.
(Toronto time) on the Business Day that is two Business Days prior to the date
of the Special Meeting, or, if the Meeting is adjourned or postponed, 5:00 p.m.
(Toronto time) on the Business Day that is two Business Days preceding the date
of such adjourned or postponed Special Meeting.

 

  (2) Shareholders who duly and validly exercise their Dissent Rights shall be
deemed to have transferred their Shares, without any further act or formality on
their part, free and clear of all Liens, to the Acquiror as provided in
Section 2.2(2), and such Shareholders who: (i) are ultimately determined to be
entitled to be paid fair value for their Shares shall be entitled to a payment
of cash equal to such fair value, and will not be entitled to any other payment
or consideration, including any payment that would be payable under the
Arrangement in respect of such Shares had such Shareholders not exercised their
Dissent Rights; or (ii) are ultimately determined not to be entitled, for any
reason, to be paid fair value for their Shares shall have participated and shall
be deemed to have participated in the Arrangement, as at the Effective Time, on
the same basis as a non-Dissenting Shareholder and shall receive cash
consideration in respect of their Shares on the basis set forth in Article 2.

 

  (3) In addition to any other restrictions under Section 190 of the CBCA, none
of the following shall be entitled to exercise Dissent Rights: (i) Optionholders
and (ii) Shareholders who vote in favour of the Arrangement Resolution.

 

  (4) In no case shall the Company, the Acquiror, the Depository, the registrar
and transfer agent in respect of the Shares or any other Person be required to
recognize a Dissenting Shareholder as a holder of Shares after the Effective
Time and the name of each Dissenting Shareholder shall be deleted from the
registers of holders of Shares as at the Effective Time as provided in Article
2.

 

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ARTICLE 4

CERTIFICATES

 

4.1 Certificates

 

From and after the Effective Time, until surrendered as contemplated by
Section 2.4, each certificate formerly representing Shares that, under the
Arrangement, were transferred or deemed to be transferred to the Acquiror in
return for cash pursuant to Section 2.2, shall represent and be deemed, at all
times after the Effective Time, to represent only the right to receive upon such
surrender the applicable amount per Share specified in Section 2.2(2) or
Section 2.2(5) of this Plan of Arrangement. From and after the Effective Time,
each Option referred to in Section 2.2(3) and any evidence thereof shall be
deemed, at all times after the Effective Time, to represent only the right to
receive the applicable Option Consideration specified in Section 2.2(3) of this
Plan of Arrangement.

 

4.2 Lost Certificates

 

In the event that any certificate which immediately prior to the Effective Time
represented one or more outstanding Shares that was sold and transferred to the
Acquiror pursuant to Section 2.2 shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such certificate
to be lost, stolen or destroyed, the Depository will pay such Person the cash
that such Person would have been entitled to had such share certificate not been
lost, stolen or destroyed. When authorizing such payment in exchange for any
lost, stolen or destroyed certificate, the Person to whom cash is to be paid
shall, at the sole discretion of the Acquiror, give a bond satisfactory to the
Acquiror in such sum as the Acquiror may direct or otherwise indemnify the
Depository and the Acquiror in a manner satisfactory to each of them against any
claim that may be made against the Depository or the Acquiror with respect to
the certificate alleged to have been lost, stolen or destroyed.

 

ARTICLE 5

GENERAL

 

5.1 Paramountcy

 

From and after the Effective Time (i) this Plan of Arrangement shall take
precedence and priority over any and all Shares and Options issued prior to the
Effective Time, (ii) the rights and obligations of the registered holders of
Shares and Options, and the Company, the Acquiror, the Depository and any
trustee or transfer agent therefor in relation thereto, shall be solely as
provided for in this Plan of Arrangement, and (iii) all actions, causes of
action, claims or proceedings (actual or contingent and whether or not
previously asserted) based on or in any way relating to any Shares or Options
shall be deemed to have been settled, compromised, released and determined
without liability except as set forth herein.

 

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5.2 Amendment

 

  (1) Subject to the Sections 5.2(2), (4), (5) and (6), the Company and the
Acquiror reserve the right to amend, modify and/or supplement this Plan of
Arrangement at any time and from time to time prior to the Effective Date,
provided that any such amendment, modification and/or supplement must be
contained in a written document which is (i) agreed to in writing by the Company
and the Acquiror, (ii) filed with the Court and, if made following the Special
Meeting, approved by the Court subject to such conditions as the Court may
impose, and (iii) if so required by the Court, communicated to Shareholders
and/or Optionholders if and in the manner as required by the Court.

 

  (2) Any amendment, modification or supplement to this Plan of Arrangement may
be proposed by the Company or the Acquiror at any time prior to or at the
Special Meeting (provided that the Company and the Acquiror shall have consented
thereto in writing), with or without any prior notice or communication, and if
so proposed and accepted by the Persons voting at the Special Meeting (other
than as may be required under the Interim Order), shall become part of this Plan
of Arrangement for all purposes.

 

  (3) Any amendment, modification and/or supplement to this Plan of Arrangement
that is approved by the Court following the Special Meeting shall be effective
only if: (i) it is agreed to by each of the Company and the Acquiror; (ii) it is
filed with the Court (other than amendments contemplated in Section 5.2(2) or
(5), which shall not require such filing), and (iii) if required by the Court,
it is consented to by holders of the Shares voting in the manner directed by the
Court.

 

  (4) Any amendment, modification and/or supplement to this Plan of Arrangement
may be made by the Acquiror unilaterally after the Effective Date without the
approval of the Shareholders or the Company provided that it concerns a matter
which, in the reasonable opinion of the Acquiror, is of an administrative or
ministerial nature required to better give effect to the implementation of this
Plan of Arrangement and is not adverse to the financial or economic interests of
the former Shareholders and Optionholders contemplated by this Plan of
Arrangement prior to giving effect to such amendment, modification and/or
supplement.

 

  (5) Notwithstanding anything in this Plan of Arrangement or the Arrangement
Agreement, the Acquiror shall be entitled, at any time prior to or following the
Special Meeting, to modify this Plan of Arrangement to increase the
consideration the Acquiror is prepared to make available to Shareholders or
Optionholders pursuant to the Arrangement, whether or not the Board of the
Company has changed its recommendation, provided that the Acquiror shall use its
commercially reasonable efforts to provide not less than one Business Day’s
prior written notice of such proposal to the Company.

 

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  (6) Notwithstanding anything in this Plan of Arrangement or the Arrangement
Agreement, no amendment, revision, update or supplement shall be made to the
Plan of Arrangement that (i) would require the Company to obtain any regulatory
approval or the approval of Shareholders in respect of such amendment, revision,
update or supplement other than at the Special Meeting, (ii) would prejudice the
Company’s securityholders or would result in the withdrawal or material
modification of the Fairness Opinion, (iii) would impede or materially delay the
consummation of the transactions contemplated by the Plan of Arrangement, or
(iv) would require the Company to take any action in contravention of applicable
Law, the Charter Documents or any material provision of any material agreement
to which it is a party.

 

5.3 Further Assurances

 

Notwithstanding that the transactions and events set out in this Plan of
Arrangement shall occur and be deemed to have occurred in the order set out
herein, without any further act or formality, each of the parties to the
Arrangement Agreement shall make, do and execute, or cause to be made, done and
executed, all such further acts, deeds, agreements, transfers, assurances,
instruments or documents as may reasonably be required by any of them in order
to implement this Plan of Arrangement and to further document or evidence any of
the transactions or events set out herein.

 

5.4 Withholding Rights

 

Notwithstanding anything in the Arrangement Agreement or this Plan of
Arrangement to the contrary, the Company, the Depository, the Acquiror or one or
more Subsidiaries of the Acquiror, as the case may be, shall be entitled to
deduct and withhold from any amount otherwise payable pursuant to this Plan of
Arrangement to any holder of Shares or Options such amounts as are required to
be deducted and withheld with respect to the making of such payment under the
Income Tax Act (Canada), the United States Internal Revenue Code of 1986, or any
provision of local, state, provincial or foreign tax Law, in each case, as
amended, or the administrative practice of the relevant Governmental Entity
administering such Law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of the Arrangement Agreement
and this Plan of Arrangement as having been paid to the former holder of the
Shares or Options, as the case may be, in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually remitted
to the appropriate taxing authority within the time required and in accordance
with applicable Laws.

 

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TABLE OF CONTENTS

 

          Page ARTICLE 1    INTERPRETATION    1

1.1

   Definitions    1

1.2

   Interpretation Not Affected by Headings    10

1.3

   Number and Gender    11

1.4

   Date for Any Action    11

1.5

   Currency    11

1.6

   Accounting Matters    11

1.7

   Knowledge    11

1.8

   Exhibits    11 ARTICLE 2    THE ARRANGEMENT AND RELATED MATTERS    12

2.1

   The Arrangement    12

2.2

   Implementation Steps by the Company    12

2.3

   Implementation Steps by the Acquiror    14

2.4

   Interim Order    15

2.5

   Articles of Arrangement    15

2.6

   Cash Proceeds per Share and Option Consideration    16

2.7

   Proxy Circular    16

2.8

   Preparation of Filings, etc.    17

2.9

   Dissenting Shareholders    18

2.10

   Amendment    18

2.11

   List of Shareholders    19

2.12

   Shareholder Communications    19

2.13

   Withholding    19

2.14

   Closing    20

2.15

   Timing Adjustment    20

2.16

   Alternative Transaction Structure    20 ARTICLE 3    REPRESENTATIONS AND
WARRANTIES    22

3.1

   Representations and Warranties of Certicom    22

3.2

   Investigation    58

3.3

   Survival of Representations and Warranties    58 ARTICLE 4    REPRESENTATIONS
AND WARRANTIES OF THE ACQUIROR    58

4.1

   Representations and Warranties    58

4.2

   Investigation    60

4.3

   Survival of Representations and Warranties    60 ARTICLE 5    COVENANTS    60

5.1

   Covenants of Certicom Regarding the Conduct of Business    60

5.2

   Covenants of Certicom Regarding the Performance of Obligations    65

5.3

   Covenants of the Acquiror Regarding the Performance of Obligations    69

5.4

   Mutual Covenants    69

 

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TABLE OF CONTENTS

(continued)

 

          Page ARTICLE 6    CONDITIONS    70

6.1

   Conditions to Each Party’s Obligation to Effect the Arrangement    70

6.2

   Additional Conditions Precedent to Obligations of the Acquiror    71

6.3

   Additional Conditions Precedent to the Obligations of Certicom    72

6.4

   Notice and Cure Provisions    73

6.5

   Merger of Conditions    74 ARTICLE 7    ADDITIONAL AGREEMENTS    74

7.1

   Non-Solicitation    74

7.2

   Right to Match    76

7.3

   Agreement as to Damages    78

7.4

   Fees and Expenses    79

7.5

   Injunctive Relief    80

7.6

   Access to Information; Confidentiality    80

7.7

   Insurance and Indemnification    80

7.8

   Certain employee matters    80

7.9

   Third Party Beneficiary    81

7.10

   Termination of Certain Plans    81 ARTICLE 8    TERM, TERMINATION, AMENDMENT
AND WAIVER    81

8.1

   Term    81

8.2

   Termination    81

8.3

   Waiver    83 ARTICLE 9    GENERAL PROVISIONS    83

9.1

   Notices    83

9.2

   Miscellaneous    84

9.3

   Governing Law    85

9.4

   Injunctive Relief    85

9.5

   Time of Essence    85

9.6

   Binding Effect and Assignment    85

9.7

   Severability    85

9.8

   Counterparts    86 Exhibit A    A-1 Exhibit B    B-1 Exhibit C    C-1
ARTICLE 1    DEFINITIONS AND INTERPRETATION    C-1

1.1

   Definitions    C-1

1.2

   Number and Gender    C-4

1.3

   Interpretation Not Affected by Headings, etc.    C-4

 

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TABLE OF CONTENTS

(continued)

 

          Page

1.4

   Time    C-4

1.5

   Currency    C-4

1.6

   Statutory References    C-4 ARTICLE 2    THE ARRANGEMENT    C-5

2.1

   Effectiveness    C-5

2.2

   The Arrangement    C-5

2.3

   Letter of Transmittal    C-6

2.4

   Delivery of Purchase Price and Option Consideration    C-6

2.5

   Expiration of Rights    C-7

2.6

   Dividends and Distributions    C-7

2.7

   Transfers Free and Clear    C-8 ARTICLE 3    RIGHTS OF DISSENT    C-8

3.1

   Dissent Rights    C-8 ARTICLE 4    CERTIFICATES    C-9

4.1

   Certificates    C-9

4.2

   Lost Certificates    C-9 ARTICLE 5    GENERAL    C-9

5.1

   Paramountcy    C-9

5.2

   Amendment    C-10

5.3

   Further Assurances    C-11

5.4

   Withholding Rights    C-11

 

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