EXHIBIT 10.4
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CERTICOM CORP.
and
COMPUTERSHARE TRUST COMPANY OF CANADA
Trustee
____________________________________
First Supplemental Indenture
Dated as of August 30, 2001
to
Trust Indenture
Dated as of August 30, 2001
providing for the issue of
7.25% Senior Convertible Unsecured Subordinated Debentures
Due August 30, 2004
____________________________________
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THIS FIRST SUPPLEMENTAL INDENTURE is made as of August 30, ▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇:
CERTICOM CORP., a corporation continued
under the laws of the Yukon Territory and
having an office in the City of Toronto
in the Province of Ontario, Canada (the
"Corporation"),
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COMPUTERSHARE TRUST COMPANY OF CANADA, a
trust company incorporated under the laws
of Canada and duly authorized to carry on
the trust business in each province of
Canada (the "Trustee").
WHEREAS by a trust indenture (hereinafter referred to as the "Trust
Indenture") made as of August 30, 2001 between the Corporation and the Trustee
provision was made for the issue of Debentures of the Corporation;
AND WHEREAS the Corporation and the Trustee have agreed to enter into this
Supplemental Indenture in order to clarify certain terms of the Trust Indenture;
AND WHEREAS the Corporation is not in default under the Trust Indenture;
AND WHEREAS all necessary acts and proceedings have been done and taken and
all necessary resolutions passed to authorize the execution and delivery of this
Supplemental Indenture and to make the same legal and valid and binding upon the
Corporation;
AND WHEREAS the foregoing recitals are made as representations and
statements of fact by the Corporation and not by the Trustee;
NOW THEREFORE THIS FIRST SUPPLEMENTAL INDENTURE WITNESSES that, in
consideration of the premises and the covenants herein contained, the parties
hereto agree as follows:
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01 Definitions
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For all purposes of this Supplemental Indenture, except as otherwise
expressly provided or unless the subject matter or context otherwise requires:
"Trust Indenture" means the trust indenture made as of August 30, 2001
between the Corporation and the Trustee relating to the creation and
issue of $13,500,000 aggregate principal amount of 7.25% Senior
Convertible Unsecured Subordinated Debentures due August 30, 2004;
"Supplemental Indenture", "hereto", "herein", "hereof", "hereby",
"hereunder" and similar expressions refer to this First Supplemental
Indenture made as of August 30, 2001 and not to any particular Article,
Section or other portion hereof, and include any and every instrument
supplemental or ancillary hereto or in implementation hereof, and the
expressions "Article" and "Section" followed by a number mean and refer
to the specified Article or Section of this Supplemental Indenture,
and all other terms and expressions used herein shall have the same meanings as
corresponding terms and expressions defined in the Trust Indenture.
Section 1.02 To be Read with Trust Indenture; Governing Law
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This Supplemental Indenture is a supplemental indenture within the
meaning of the Trust Indenture and this Supplemental Indenture shall be read
together and shall have effect, so far as practicable, as though all the
provisions of the Trust Indenture and this Supplemental Indenture were contained
in one instrument, which instrument shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
ARTICLE 2
AMENDMENTS
Section 2.01 Article 2 - The Debentures
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(1) Subsection 2.2.(d) of the Trust Indenture is hereby amended by deleting
the reference in the first line thereof to "sections 3.9 and 3.18" and
substituting therefor a reference to "section 3.18".
(2) Subsection 2.6(a) of the Trust Indenture is hereby deleted in its
entirety and the following shall be substituted therefor:
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"(a) Every Debenture, whether issued originally or in exchange
for other Debentures, shall bear interest from and including the
date of issue or from and including the last interest payment
date to which interest shall have been paid or made available for
payment on the Debentures, whichever shall be later."
Section 2.02 Article 3 - Redemption and Purchase For Cancellation of
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Debentures
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(1) Subsection 3.6(a) of the Trust Indenture is hereby amended by
deleting the words "Subject to section 3.9, upon" in the first line thereof and
substituting therefor the word "Upon".
(2) Section 3.7 of the Trust Indenture is hereby deleted in its
entirety and the following shall be substituted therefor:
"3.7 Failure to Surrender Debentures Called for Redemption
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If the Holder of any Debentures called for redemption
shall, within 30 days from the date fixed for redemption, fail to
surrender any of such Debentures or shall not within such time
accept payment of the Redemption Price payable in respect
thereof, including certificates representing Common Shares
issuable to such Holder, as the case may be, or give such receipt
therefor, if any, as the Trustee may require, such Redemption
Price shall be set aside in trust for such Holder, in accordance
with section 12.10; and such setting aside shall for all purposes
be deemed a payment to the Debentureholder of the sum so set
aside, and to that extent such Debentures shall on and after the
redemption date thereafter not be considered as outstanding
hereunder and the Debentureholder shall have no right except to
receive payment out of the moneys so paid and deposited, upon
surrender of his Debentures, of the Redemption Price of such
Debentures without interest thereon."
(3) Section 3.9 of the Trust Indenture is hereby deleted in its
entirety.
(4) Section 3.10 of the Trust Indenture is hereby deleted in its
entirety.
(5) Section 3.11 of the Trust Indenture is hereby deleted in its
entirety and the following shall be substituted therefor:
"3.11 Restricted Debentures
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The Debentures and Common Shares issuable upon
conversion or repurchase of the Debentures have not been and will
not be registered under the U.S. Securities Act and Debentures
and Common Shares issuable upon conversion or repurchase of
Debentures may not be offered, sold, pledged or transferred
within the United States or to, or for the account or benefit of,
a U.S. Person and may be offered, sold, pledged or
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otherwise transferred only outside the United States in
accordance with the U.S. Securities Act."
(6) Section 3.12 of the Trust Indenture is hereby deleted in its
entirety.
(7) Section 3.13 of the Trust Indenture is hereby deleted in its
entirety.
(8) Subsection 3.16(c)(ii) of the Trust Indenture is hereby amended
by inserting the words ", which date shall not be prior to the tenth Business
Day following the date of mailing of such notice" in the fourth line immediately
following the words "payment date".
(9) Subsection 3.16(i) of the Trust Indenture is hereby deleted in
its entirety and the following shall be substituted therefor:
"(i) The provisions of section 3.7 apply mutatis mutandis to
the Corporation's obligation to satisfy the purchase price under
an Offer to Purchase except that reference to the Redemption
Price in such section shall be deemed to be a reference to the
Offer to Purchase Price for the purpose of this section 3.16;"
(10) Article 3 of the Trust Indenture is hereby supplemented by
inserting the following immediately after Section 3.17 of the Trust Indenture:
"3.18 Payment of Offer to Purchase Price
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Subject to section 3.19 and applicable law and
regulatory approval, and notwithstanding any other provision of
this Indenture, the Corporation may, at its option, in the case
of an Offer to Purchase on notice given not less than five
Trading Days preceding the Change of Control Date to the Trustee
and the Holders of the Debentures and in accordance with
subsection 3.20 and Article 11, elect to satisfy and discharge
its obligation hereunder and under the Debentures to pay all or
any part of the Offer to Purchase Price by paying (A) cash, (B)
issuing and delivering, or causing to be issued and delivered,
freely tradeable, fully paid and non-assessable Common Shares or
freely tradeable, fully paid and non-assessable securities of the
successor Person resulting from the Change of Control or of the
Person that made the offer to purchase Common Shares resulting in
the Change of Control or such Person's Affiliate, provided in
each case that such securities were issued to holders of Common
Shares in connection with the Change of Control or (C) any
combination of cash, Common Shares or such securities. The
satisfaction of the Offer to Purchase Price payable to a Holder
shall occur by the delivery to the Holder of cash and/or
securities (or securities that are convertible thereinto or
exchangeable therefor) as provided under this section 3.18, such
securities being valued, in the case of Common Shares, at 95% of
the Current Market Price as at the Change of Control Date and, in
the case of other securities, at 95% of the weighted average
trading price of such
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securities on the principal stock exchange, quotation system or
market on which such securities are listed, quoted or traded for
the period of 20 consecutive trading days on such exchange,
quotation system or market ending five trading days before the
Change of Control Date. The Corporation may not exercise the
right conferred by this section 3.18 if an Event of Default
hereunder has occurred and is continuing at the date of the
notice referred to in this section 3.18.
3.19 Issue of Common Shares on Repurchase of Debentures Upon
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a Change of Control
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(a) If the Corporation elects under section 3.18 to satisfy
its obligation to pay all or any part of the Offer to Purchase
Price on the Payment Date by the issue of Common Shares or other
securities and if otherwise permitted to do so by law, the
Corporation will issue or cause to be issued that number of
Common Shares or other securities determined under section 3.18,
and will deliver to the Trustee the following:
(i) a Certificate of the Corporation certifying
that no Event of Default hereunder has occurred
and is continuing as at the date of the notice
referred to in section 3.18; and
(ii) an opinion of Counsel that (i) all requirements
imposed by this Indenture or by the laws of
Canada and any applicable province thereof (based
on the addresses of Holders set forth in the
general register kept by the Corporation pursuant
to section 2.8 as at the Payment Date) in
connection with the proposed issue of Common
Shares or other securities have been complied
with including that no prospectus or similar
document is required to be filed or
authorizations of regulatory authorities required
to be obtained under applicable legislation of
any province of Canada (other than as may have
been filed or obtained) before such Common Shares
or other securities may properly and legally be
issued and, once issued, traded without being
subject to any general restriction as to the
resale thereof provided such Common Shares or
other securities are traded through persons
registered, if required, under applicable laws,
(ii) on the Payment Date the Common Shares or
other securities will have been validly issued
and upon such issue in satisfaction of the
Corporation's obligation to pay all or any part
of the Offer to Purchase Price will be
outstanding as fully paid and non-assessable
securities, and (iii) if the Common Shares or
other securities are then quoted on NASDAQ and/or
listed on the TSE, application to quote the
Common Shares or
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other securities so issued has been made to
NASDAQ and the Common Shares or other securities
so issued have been conditionally approved for
listing on the TSE (or on such other principal
stock exchange, quotation system or market as the
Common Shares or other securities may then be
listed, quoted or traded), subject to compliance
with the requirements of such stock exchange,
quotation system or market.
(b) If any order, ruling, registration, notice or filing
pursuant to any securities laws of Canada or any province thereof
is required to ensure that any Common Shares or other securities
issuable on the Payment Date are issued in compliance with all
such laws or to ensure that any such Common Shares or other
securities, once issued, are not subject to any general
restriction as to the resale thereof provided that such Common
Shares or other securities are traded through persons registered,
if required under applicable laws, the Corporation covenants that
it will take or cause to be taken all action as may be necessary
to make or obtain such order, ruling, registration or filing, or
give such notice, as the case may be.
(c) If the provisions of subsections 3.19 (a)(i) and (ii)
are not complied with, the Offer to Purchase Price payable on the
Payment Date will be payable in lawful money of Canada as
otherwise provided hereunder. If such provisions are complied
with, the issue by the Corporation or such other Person referred
to in clause 3.18(B) or such Person's Affiliates of that number
of Common Shares or other securities determined under section
3.18 shall fully satisfy and discharge the obligation of the
Corporation to pay all or any part of the Offer to Purchase Price
determined to be satisfied in accordance with subsection 3.18 on
the Payment Date.
3.20 General Requirements
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(a) The notice to the Trustee and Holders of Debentures to
be given by the Corporation pursuant to section 3.18 must:
(i) state that the Corporation has exercised its
option to pay all or any part of the Offer to
Purchase Price payable to the Holders of
Debentures on the Payment Date by the issue of
Common Shares or other securities to the Holders
of Debentures;
(ii) advise each Holder of Debentures that the
Common Shares or other securities to be issued in
respect of such Holder's Debentures will be
registered in the name of the Holder unless the
Trustee receives from such Holder, on or before
5:00 p.m. (Toronto time) on the fifth Business
Day prior to
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the Payment Date at its principal stock transfer
office in the City of Toronto written notice in
form and substance satisfactory to the Trustee
directing the Corporation to register or to
direct the registration of such Common Shares or
other securities in some other name or names and
stating the name or names (with addresses),
accompanied by payment to the Trustee of any
transfer tax which may be payable by reason
thereof; and
(iii) advise each Holder that such Holder may, on or
after the Payment Date and on proof of identity
satisfactory to the Trustee, take personal
delivery of the certificates representing that
Holder's Common Shares or other securities so
issued, at the principal stock transfer office of
the Trustee in the City of Toronto if the Trustee
receives from such Holder at such principal stock
transfer office, in addition to any other notice
or delivery required by this subsection and on or
before 5:00 p.m. (Toronto time) on the fifth
Business Day prior to the Payment Date written
notice in form and substance satisfactory to the
Trustee, stating that such Holder wishes to take
personal delivery of the Common Shares or other
securities issued pursuant hereto at the
principal stock transfer office of the Trustee in
the City of Toronto; and
(b) On the Payment Date the Corporation will, subject to
subsections 3.20(a)(ii) and (iii), cause to be sent by prepaid
ordinary mail (or, in the event of mail service interruption, by
such other means as the Trustee and the Corporation determine to
be appropriate), certificates for Common Shares or other
securities issued pursuant to section 3.18 to each Holder of
Common Shares or other securities in respect of which Debentures
have been surrendered in accordance with the requirements of the
notice, given pursuant to subsection 3.20(a), at their addresses
as shown on the records of the Corporation.
(c) On or after the Payment Date the Corporation will deliver
certificates representing the Common Shares or other securities
issued pursuant to section 3.19 to any other registered Holder
thereof, upon presentation and surrender of the Debentures in
respect of which such Common Shares or other securities were
issued.
(d) Each certificate delivered pursuant to this section 3.20 will
be for that number of Common Shares or other securities that is
the Holder's proportionate share of the number of Common Shares
or other securities determined in accordance with section 3.18.
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(e) Interest accrued and unpaid on the Debentures on the
Payment Date will be paid to the Holders of Debentures in the
manner contemplated in Article 2 except that the Corporation may,
at its option, forward payment of interest contemporaneously with
the sending of Common Shares or other securities under
subsections 3.20(a)(iii) or 3.20(b).
3.21 No Requirement to Issue Fractional Shares or Other
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Security
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The Corporation shall not be required to issue or cause
to be issued fractional Common Shares or other securities upon
the issue of Common Shares or other securities pursuant to
section 3.18. If any fractional interest in a Common Share or
other security would, except for the provisions of this section,
be deliverable upon the issue of any Common Shares or other
securities pursuant to section 3.18, the Corporation shall, in
lieu of delivering any certificate representing such fractional
interest, satisfy such fractional interest by paying to the
registered holder of such shares an amount in lawful money of
Canada equal (computed to the nearest cent) to the appropriate
fraction, in the case of any fraction of any Common Share, of the
Current Market Price of the Common Shares as at the Payment Date
and, in the case of a fraction of any other security, of the
weighted average trading price of such securities on the
principal stock exchange, quotation system or market on which
such securities are listed, quoted or traded for the period of 20
consecutive trading days on such exchange, quotation system or
market as at the date ending five trading days before the Payment
Date."
Section 2.03 Article 4 - Conversion
----------------------
(1) Subsection 4.2(e)(i) of the Trust Indenture is hereby amended by
deleting the reference to "June 30, 2003" in the first line thereof and
substituting therefor a reference to "August 30, 2003".
(2) Subsection 4.12(b) of the Trust Indenture is hereby amended by
deleting the reference to "section 3.19" and substituting therefor a reference
to "section 3.17".
Section 2.04 Article 8 - Satisfaction and Discharge
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Section 8.3 of the Trust Indenture is hereby amended by
deleting the reference to "sections 3.6, 3.9, 3.16, 3.17, 3.18" in the first
line thereof and substituting therefor a reference to "sections 3.6, 3.7, 3.16
and 3.19".
Section 2.05 Schedule "A" (Form of Debenture)
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Schedule "A" of the Trust Indenture is hereby amended by
deleting the words "the date hereof" in the eighth line thereof and substituting
therefor the words "the date of issue hereof".
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ARTICLE 3
MISCELLANEOUS PROVISIONS
Section 3.01 Confirmation of Trust Indenture
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The Trust Indenture, as amended and supplemented by this Supplemental
Indenture, is in all respects confirmed.
Section 3.02 Acceptance of Trusts
--------------------
The Trustee hereby accepts the trusts in this Supplemental Indenture
declared and provided for and agrees to perform the same upon the terms and
conditions and subject to the provisions set forth in the Trust Indenture as
supplemented by this Supplemental Indenture.
Section 3.03 Counterparts and Formal Date
----------------------------
This Supplemental Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original; but and all such
counterparts together shall constitute but one and the same instrument and
notwithstanding the date of execution shall be deemed to bear the date August
30, 2001.
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IN WITNESS WHEREOF the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
CERTICOM CORP.
By: ______________________________
By: ______________________________
COMPUTERSHARE TRUST
COMPANY OF
CANADA
By: ______________________________
By: ______________________________
