VERISIGN INC/CA
8-K, 2000-02-16
COMPUTER PROGRAMMING SERVICES
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<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 8-K


                                CURRENT REPORT
                        Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934


      Date of Report (Date of earliest event reported): February 1, 2000


                                VERISIGN, INC.
- --------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)


                                   Delaware
            ------------------------------------------------------
                (State or other jurisdiction of incorporation)



         0-23596                                               94-3221585
- ----------------------------                        ----------------------------
       (Commission                                           (IRS Employer
       File Number)                                       Identification No.)


        1350 CHARLESTON ROAD, MOUNTAIN VIEW, CA                    94043-1331
- --------------------------------------------------------------------------------
               (Address of principal executive offices)            (Zip Code)


                                (650) 961-7500
- --------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)
<PAGE>

Item 2:  Acquisition or Disposition of Assets.

         On February 1, 2000, VeriSign completed the acquisition of THAWTE
Consulting, a provider of digital certificates to websites and software
developers, from its sole shareholder. In the transaction, VeriSign acquired all
of the share capital of THAWTE Holdings (Pty) Ltd. and THAWTE USA, Inc. in
exchange for approximately 4.4 million shares of VeriSign Common Stock. The
acquisition will be accounted for as a purchase and is not intended to qualify
as a tax-free reorganization.

         In connection with this transaction, VeriSign has filed a shelf
registration statement for the public resale of the shares issued in the
exchange.

Item 7:  Financial Statements, Pro Forma Financial Information and Exhibits.

              (a)     Financial Statements of Business Acquired.

              VeriSign intends to file by amendment the required historical
financial statements for THAWTE no later than 60 days after the date of this
Form 8-K.

              (b)     Pro Forma Financial Information.

              VeriSign intends to file by amendment the required pro forma
financial statements reflecting the acquisition of all of the issued and
outstanding capital stock of THAWTE no later than 60 days after the date of this
Form 8-K.

             (c)      Exhibits.

                      The following exhibits are filed with this Form 8-K:

                      2.1   Exchange Agreement dated as of December 19, 1999
                            between VeriSign, Inc. and Mark Shuttleworth.

                                       2
<PAGE>

                                  SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                 VERISIGN, INC.



Date:  February 14, 2000      By: /s/ DANA L. EVAN
                                  ----------------
                                      Dana L. Evan
                                      Executive Vice President of Finance and
                                      Administration and Chief Financial Officer

                                       3
<PAGE>

                                 Exhibit Index


                  2.1   Exchange Agreement dated as of December 19, 1999 between
                        VeriSign, Inc. and Mark Shuttleworth.

                                       4

<PAGE>

                                                                     EXHIBIT 2.1

                              EXCHANGE AGREEMENT

     THIS EXCHANGE AGREEMENT (this "Agreement") is made and entered into as of
December 19, 1999 (the "Agreement Date") by and between VERISIGN, INC., a
Delaware corporation ("VeriSign"), and MARK SHUTTLEWORTH, an individual ("THAWTE
Shareholder"), who is the sole shareholder of THAWTE HOLDINGS (PTY) LTD., a
corporation organized and existing under the laws of the Republic of South
Africa ("THAWTE SOUTH AFRICA"), and THAWTE [USA], Inc., a North Carolina
corporation ("THAWTE USA") (THAWTE SOUTH AFRICA and THAWTE USA are sometimes
collectively referred to as "THAWTE").

                                   RECITALS

     A.   The parties intend that, subject to the terms and conditions of this
Agreement, VeriSign will acquire 100% of the issued and outstanding share
capital of THAWTE from the THAWTE Shareholder pursuant to the terms and
conditions set forth herein in exchange for shares of VeriSign Common Stock.

     B.   Upon the effectiveness of the Exchange (as defined below), all the
issued and outstanding shares of THAWTE will be transferred to VeriSign in
exchange for shares of VeriSign Common Stock.

     C.   The representations and warranties of the THAWTE Shareholder herein
are a material inducement to VeriSign to enter into this Agreement.

     D.   The parties acknowledge that the Exchange will not qualify as, and is
not intended to qualify as, a reorganization under Section 368 of the U.S.
Internal Revenue Code of 1986, as amended (the "Code").

     NOW, THEREFORE, the parties hereby agree as follows:

     1.   CERTAIN DEFINITIONS. As used in this Agreement, the following terms
will have the meanings set forth below:

          1.1  "Closing" is defined in Section 7.1.

          1.2  "Closing Date" is defined in Section 7.1.

          1.3  "Entrust Agreement" means that certain Comprehensive Cross
Certification Agreement, dated June 1, 1999, between Thawte Consulting (Pty)
Ltd. and Entrust Technologies, Inc.

          1.4  "Exchange" means, collectively, the exchange of all of the issued
and outstanding THAWTE Stock for the Exchange Shares contemplated by Section 2
below.

          1.5  "Exchange Number" means the quotient obtained by dividing (i) the
Exchange Shares (as defined below) by (ii) the THAWTE Fully Diluted Number.
<PAGE>

          1.6  "Exchange Shares" means the total number of shares of VeriSign
Common Stock, as presently constituted, that will be issued under this Agreement
in exchange for all of the shares of THAWTE Stock that are issued and
outstanding immediately prior to the Closing and is equal to the number of
Transaction Shares minus the number of Restraint Shares.

          1.7  "Restraint Shares" means the total number of shares of VeriSign
Common Stock, as presently constituted, that will be issued under this Agreement
in exchange for the Non-Competition Agreements described in Section 5.13, in the
numbers and to the persons (the "Restrained Persons") set forth in Exhibit 9.9
hereto, which number of Restraint Shares are contemplated, as of the date
hereof, to equal approximately [1%] of the Transaction Shares. In the event that
any of the Non-Competition Agreements are not entered into and effective as of
the Closing, or in the event that such Restrained Persons shall fail to satisfy
the requirements set forth in Section 2.1.4 hereof, the Restraint Shares
designated in Exhibit 9.9 with respect to each such Restrained Person will be
issued instead to the THAWTE Shareholder as Exchange Shares.

          1.8  "Shareholder Ancillary Agreements" means, collectively the
Investment Representation Letter, the Escrow Agreement, the Registration Rights
Agreement, the Share Transfer Form CM-42, being the form prescribed by South
African law (the "Share Transfer Form"), Form W-8 and each other agreement,
certificate or document (other than this Agreement) to which the THAWTE
Shareholder is to enter into as a party thereto, or is to otherwise execute and
deliver pursuant to or in connection with this Agreement.

          1.9  "THAWTE Ancillary Agreements" means, collectively, each
agreement, certificate or document (other than this Agreement) which THAWTE is
to enter into as a party thereto, or is to otherwise execute and deliver,
pursuant to or in connection with this Agreement.

          1.10 "THAWTE Certificates" means the share certificates representing
all the THAWTE Shareholder's shares of THAWTE Stock.

          1.11 "THAWTE Fully Diluted Number" means that number that is equal to
the sum of the total number of shares that THAWTE SOUTH AFRICA Stock that are
issued and outstanding immediately prior to the Closing.

          1.12 "THAWTE Shareholder" means Mark Shuttleworth who, immediately
prior to the Closing, holds all the shares of THAWTE Stock that are issued and
outstanding immediately prior to the Closing.

          1.13 "THAWTE SOUTH AFRICA Stock" means shares in the share capital of
THAWTE SOUTH AFRICA, ZAR 1,00 par value per share, comprising the entire issued
capital of THAWTE SOUTH AFRICA, as constituted immediately prior to the Closing.

          1.14 "THAWTE Stock" means the THAWTE SOUTH AFRICA Stock together with
the THAWTE USA Stock.
<PAGE>

          1.15 "THAWTE USA Stock" means shares in the share capital of THAWTE
USA, $1.00 par value per share, comprising the entire issued capital of THAWTE
USA, as constituted immediately prior to the Closing.

          1.16 "Transaction Shares" means the total number of shares of VeriSign
Common Stock, as presently constituted that will be issued under this Agreement
to the THAWTE Shareholder, the Restrained Persons, and the Escrow Agent, and is
equal to the quotient obtained by dividing (i) U.S. $575,000,000 by (ii) the
VeriSign Average Price Per Share.

          1.17 "VeriSign Ancillary Agreements" means, collectively, each
agreement, certificate or document (other than this Agreement) which VeriSign is
to enter into as a party thereto, or is to otherwise execute and deliver,
pursuant to or in connection with this Agreement.

          1.18 "VeriSign Average Price Per Share" means the lower of the closing
price per share of VeriSign Common Stock (in U.S. dollars) as quoted on the
Nasdaq National Market (or such other exchange or quotation system on which
VeriSign Common Stock is then traded or quoted) and reported in The Wall Street
                                                                ---------------
Journal for the trading day prior to the Agreement Date, or, the average of the
- -------
closing prices per share of VeriSign Common Stock (in U.S. dollars) as quoted on
the Nasdaq National Market (or such other exchange or quotation system on which
VeriSign Common Stock is then traded or quoted) and reported in The Wall Street
                                                                ---------------
Journal for the ten (10) trading days ending on, and inclusive of, the Closing
- -------
Date;

          1.19 "VeriSign Common Stock" means the Common Stock, $0.001 par value
per share, of VeriSign.

     Other capitalized terms defined elsewhere in this Agreement and not defined
in this Section 1 shall have the meanings assigned to such terms in this
Agreement.

     2.   THE EXCHANGE

          Subject to the terms and conditions of this Agreement, at the Closing:

               (a)  the THAWTE Shareholder shall irrevocably assign and transfer
to VeriSign all of the shares of the THAWTE Stock;

               (b)  VeriSign shall issue to the THAWTE Shareholder the Exchange
Shares with 99.5% of such number of shares being issued in exchange for the
THAWTE SOUTH AFRICA stock and 0.5% in exchange for the THAWTE USA Stock;

               (c)  VeriSign shall pay the THAWTE Shareholder U.S. $59,000 in
cash for the THAWTE SOUTH AFRICA stock and U.S.$500 for the THAWTE USA stock;
and

               (d)  subject to the requirements of Section 2.1.4 hereof,
VeriSign shall issue to the Restrained Persons the Restraint Shares.
<PAGE>

                  2.1  Exchange of Shares.
                       ------------------

                       2.1.1  Exchange of THAWTE Stock. Subject to surrender and
                              ------------------------
delivery to VeriSign by the THAWTE Shareholder of the applicable THAWTE
Certificates at the Closing and the accompanying Share Transfer Form and Form W-
8, the THAWTE Shareholder shall receive a stock certificate for its Exchange
Shares (less the Escrow Shares, as defined below) at the Closing.

                       2.1.2  Fractional Shares. No fractional shares of
                              -----------------
VeriSign Common Stock shall be issued in connection with the Exchange. Instead,
VeriSign shall issue VeriSign Common Stock in an amount rounded up to the next
whole share.

                       2.1.3  Registration Rights. Effective upon the Closing,
                              -------------------
the THAWTE Shareholder and the Restrained Persons shall be granted registration
rights under the Securities Act of 1933, as amended (the "1933 Act") on the
terms and subject to the conditions and limitations of the Registration Rights
Agreement attached hereto as Exhibit 2.1.3 (the "Registration Rights
                             -------------
Agreement").

                       2.1.4  Restraint Shares. The issuance of the Restraint
                              ----------------
Shares shall be subject to (i) the availability (as determined in the reasonable
discretion of VeriSign and its counsel) of an exemption under Section 4(2) of
the 1933 Act and Rule 506 promulgated thereunder, (ii) the completion by the
Restrained Persons of Investment Representation Letters (as defined in Section
2.5 below), and (iii) the performance by the Restrained Persons of such actions
as VeriSign may reasonably request (including, but not limited to, the
engagement by the Restrained Persons, at their own expense, of a suitable
purchaser representative, as defined in Rule 502 promulgated under the 1933
Act). In the event that VeriSign determines, in its reasonable discretion, that
the conditions set forth herein are not satisfied, VeriSign shall not issue the
Restraint Shares, but shall instead, adjust the number of the Exchange Shares
and shall issue such additional Exchange Shares to the THAWTE Shareholder
pursuant to the terms hereof.

                  2.2   Adjustments for Capital Changes. Notwithstanding the
                       -------------------------------
provisions of Section 2.1, if at any time after the Agreement Date and prior to
the Closing, VeriSign or THAWTE recapitalizes, either through a subdivision (or
stock split) of any of its issued and outstanding shares into a greater number
of shares, or a combination (or reverse stock split) of any of its issued and
outstanding shares into a lesser number of shares, or reorganizes, reclassifies
or otherwise changes its issued and outstanding shares into the same or a
different number of shares of other classes (other than through a subdivision or
combination of shares provided for in the previous clause), or declares a
dividend on its issued and outstanding shares payable in shares or securities
convertible into shares of VeriSign Common Stock (a "Capital Change"), then the
number of shares of VeriSign Common Stock for which shares of THAWTE Stock are
to be exchanged in the Exchange shall be appropriately, equitably and
proportionately adjusted (as agreed to in writing by VeriSign and THAWTE if the
adjustment for such Capital Change involves something other than a mathematical
adjustment) so as to maintain the proportionate interests of the Shareholder of
THAWTE and the Shareholder of VeriSign
<PAGE>

contemplated hereby so as to maintain the proportional interests of the holders
of THAWTE Stock contemplated by this Agreement. The provisions of this Section
shall not apply to any transaction not permitted to be undertaken by THAWTE
under the provisions of this Agreement. In the event that a Capital Change
affecting VeriSign Common Stock occurs prior to the Closing, then all prices per
share and numbers of shares used to compute the Exchange Number shall be deemed
to have been equitably adjusted to reflect such Capital Change as necessary to
effect the purposes and intent of this Section.

                 2.3   Escrow Agreement. At the Closing, VeriSign shall withhold
                       ----------------
ten percent (10%) of the Transaction Shares (the "Escrow Shares") and will
deliver certificates representing such Escrow Shares to Chase Manhattan Bank and
Trust Company, N.A. or a similar institution as agreed to in writing by the
parties, as escrow agent (the "Escrow Agent"), together with related stock
transfer powers, to be held by the Escrow Agent as security for the THAWTE
Shareholder's indemnification obligations under Section 11 and pursuant to the
provisions of an Escrow Agreement (the "Escrow Agreement") in substantially the
form of Exhibit 2.4. The Escrow Shares will be represented by certificates
        -----------
issued in the name of the THAWTE Shareholder and will be held by the Escrow
Agent during that time period (the "Escrow Period") specified in the Escrow
Agreement. The THAWTE Shareholder hereby consents to, approve and agree to be
personally bound by: (i) the indemnification provisions of Section 11 of this
Agreement; (ii) all of the terms, conditions and limitations in the Escrow
Agreement; and (iii) the appointment of Mark Shuttleworth as the representative
of the THAWTE Shareholder (the "Representative") under the Escrow Agreement and
as the attorney-in-fact and agent for and on behalf of the THAWTE Shareholder as
provided in the Escrow Agreement, and the taking by the Representative of any
and all actions and the making of any and all decisions required or permitted to
be taken by the Representative under the Escrow Agreement (including, without
limitation, the exercise by the Representative of the power to: (i) authorize
delivery to VeriSign of Escrow Shares in satisfaction of claims by VeriSign or
any other Indemnified Person (as defined herein); (ii) agree to, negotiate and
enter into settlements and compromises of such claims, and demand arbitration
and comply with orders of courts and awards of arbitrators with respect to such
claims; (iii) arbitrate, resolve, settle or compromise any claim for indemnity
made pursuant to Section 11; and (iv) take all actions necessary in the judgment
of the Representative for the accomplishment of the foregoing). The
Representative will have unlimited authority and power to act on behalf of the
THAWTE Shareholder with respect to the Escrow Agreement and the disposition,
settlement or other handling of all claims governed by the Escrow Agreement, and
all rights or obligations arising under the Escrow Agreement. The THAWTE
Shareholder will be bound by all actions taken by the Representative in
connection with the Escrow Agreement, and VeriSign will be entitled to rely on
any action or decision of the Representative. In performing the functions
specified in this Agreement and the Escrow Agreement, the Representative will
not be liable to the THAWTE Shareholder in the absence of gross negligence or
willful misconduct on the part of the Representative. Any out-of-pocket costs
and expenses reasonably incurred by the Representative in connection with
actions taken pursuant to the terms of the Escrow Agreement will be paid by the
THAWTE Shareholder.

                 2.4   Further Assurances. If, at any time after the Closing,
                       ------------------
the parties hereto consider or are advised that any further instruments, deeds,
assignments or assurances are
<PAGE>

reasonably necessary or desirable to consummate the Exchange or to carry out the
purposes of this Agreement at or after the Closing, then VeriSign and the THAWTE
Shareholder shall execute and deliver all such proper deeds, assignments,
instruments and assurances and do all other things necessary or desirable to
consummate the Exchange and to carry out the purposes and intent of this.

                 2.5   Securities Laws Issues. VeriSign shall issue the Exchange
                       ----------------------
Shares and the VeriSign Options pursuant to an exemption from registration under
Section 4(2) and/or Regulation D promulgated under the 1933 Act. Concurrently
with execution of this Agreement, the THAWTE Shareholder will execute and
deliver to VeriSign an Investment Representation Letter in the form of Exhibit
                                                                       -------
2.5 hereto (the "Investment Representation Letter").
- ---

                 2.6   Example. Exhibit 2.6 hereto sets forth an illustration of
                       -------  -----------
the operation of the provisions of Section 2 of this Agreement regarding the
exchange of shares of THAWTE Stock in the Exchange, and the issuance of the
Restraint Shares and the Escrow Shares.

          3.     REPRESENTATIONS AND WARRANTIES OF THE THAWTE SHAREHOLDER

                 The THAWTE Shareholder hereby represents and warrants to
VeriSign that each of the following representations and statements in this
Section 3 are true and correct.

                 3.1   Organization and Good Standing. THAWTE is a company duly
                       ------------------------------
organized, validly existing and in good standing under the laws of the Republic
of South Africa. THAWTE has the corporate power and authority to own, operate
and lease its properties and to carry on its business as now conducted and as
proposed to be conducted, and is duly qualified to transact business as a
foreign corporation in each jurisdiction in which its failure to be so qualified
would have a Material Adverse Effect. As used in this Agreement, the term
"Material Adverse Effect" when used with reference to THAWTE (either alone or
collectively with all THAWTE Subsidiaries, as defined below), means any event,
change or effect that is (or will with the passage of time be) materially
adverse to THAWTE's condition (financial or otherwise), properties, assets,
liabilities, business, operations, or results of operations, it being understood
that none of the following shall be deemed by itself or by themselves, either
alone or in combination, to constitute a Material Adverse Effect: (a) any effect
arising out of or resulting from actions contemplated by the parties in
connection with the announcement of this Agreement and the transactions
contemplated hereby, or (b) the termination of the Entrust Agreement by Entrust.

                 3.2   Power, Authorization and Validity.
                       ---------------------------------

                       3.2.1  The THAWTE Shareholder has the right, power, legal
capacity and authority to enter into, execute, deliver and perform such THAWTE
Shareholder's obligations under this Agreement and all Shareholder Ancillary
Agreements and has the requisite power and authority to consummate the Exchange,
in each case, subject only to the regulatory approval set forth in Section
3.2.2.
<PAGE>

                       3.2.2  No filing, authorization, consent, approval or
order, governmental or otherwise, required by South African Law is necessary or
required to be made or obtained by the THAWTE Shareholder to enable the THAWTE
Shareholder to lawfully enter into, and to perform his respective obligations
under, this Agreement and/or the Shareholder Ancillary Agreements, other than
Exchange Control Approval under South African Law.

                       3.2.3  This Agreement and the Shareholder Ancillary
Agreements are, or when executed by the THAWTE Shareholder will be, valid and
binding obligations of such THAWTE Shareholder enforceable in accordance with
their respective terms, except as to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally
and (b) rules of law governing specific performance, injunctive relief and other
equitable remedies.

                       3.2.4  All representations, warranties and other
statements made by the THAWTE Shareholder in the Investment Representation
Letter executed and delivered to VeriSign by such THAWTE Shareholder pursuant
hereto (a) is now, and at the Closing shall be true and correct, and (b) shall
be deemed to be representations and warranties made pursuant to this Section 3
for all purposes of this Agreement (including but not limited to Section 11
hereof) and the Escrow Agreement.

                  3.3  Capitalization of THAWTE.
                       ------------------------

                       3.3.1  Authorized Share Capital. The authorized share
                              ------------------------
capital of THAWTE SOUTH AFRICA consists entirely of 1,000 ordinary shares, ZAR
1,00 par value per share, of which a total of 100 shares are issued and
outstanding, all of which are now owned and held (and all of which at the
Closing will be owned and held) only by the THAWTE Shareholder. No other shares
in the share capital of THAWTE SOUTH AFRICA are (or will at Closing be)
authorized, issued or outstanding. No fractional shares of THAWTE SOUTH AFRICA
Stock are (or will at Closing be) issued or outstanding. All issued and
outstanding shares of THAWTE Stock have been duly authorized and validly issued,
are fully paid and nonassessable, are not subject to any claim, lien, preemptive
right, or right of rescission (other than the rights of all companies organized
under South African company law to repurchase shares), and have been offered,
issued, sold and delivered by THAWTE (and, if applicable, transferred) in
compliance with all registration or qualification requirements (or applicable
exemptions therefrom) of all applicable securities laws, THAWTE's Articles and
Memorandum of Association and other charter documents and all agreements to
which THAWTE or the THAWTE Shareholder is a party. The THAWTE Shareholder owns
and holds (and at the Closing will own and hold) all of the issued and
outstanding share capital of THAWTE USA.

                       3.3.2  No Options, Warrants or Rights. There are no
                              ------------------------------
options, warrants, convertible or other securities, calls, commitments,
conversion privileges, preemptive rights or other rights or agreements
outstanding to purchase or otherwise acquire (whether directly or indirectly)
any shares of THAWTE's share capital or any securities convertible into or
exchangeable for any shares of THAWTE's capital stock or obligating THAWTE to
grant, issue, extend, or enter into, any such option, warrant, convertible or
other security, call, commitment,
<PAGE>

conversion privilege, preemptive right or other right or agreement, and THAWTE
has no liability for any dividends accrued but unpaid. No person or entity holds
or has any option, warrant or other right to acquire any issued and outstanding
shares of the capital stock of THAWTE from any record or beneficial holder of
shares of the capital stock of THAWTE. No shares of THAWTE Stock are reserved
for issuance under any stock purchase, stock option or other benefit plan.

                       3.3.3  No Voting Arrangements or Registration Rights.
                              ---------------------------------------------
There are no voting agreements, voting trusts, rights of first refusal or other
restrictions (other than normal restrictions on transfer under applicable
securities laws) applicable to any of THAWTE's issued and outstanding shares of
to the conversion of any shares of THAWTE Stock in the Exchange. THAWTE is not
under any obligation to register under the Securities Exchange Act of 1934, as
amended or otherwise any of its presently issued and outstanding securities or
any securities that may be subsequently issued.

                  3.4  Subsidiaries.
                       ------------

                       3.4.1  Organizational Data. THAWTE has never been a
                              -------------------
subsidiary of any corporation, partnership, limited liability company, joint
venture or other business entity, other than the THAWTE Shareholder or other
than holdings of nominal amounts of shares by the incorporator(s) of THAWTE,.
Exhibit 3.4 sets forth any interest, direct or indirect, in any corporation,
- -----------
partnership, limited liability company, joint venture or other business entity
held by THAWTE (the "THAWTE Subsidiaries") and the THAWTE Subsidiaries. Exhibit
3.4 lists, with respect to THAWTE and each of the THAWTE Subsidiaries, its exact
legal name; the jurisdiction of formation; date of formation; federal employer
identification number or equivalent, if such identification number exists;
number and type of securities authorized and outstanding; name and address of
each security holder; name, address, telephone and fax number of each officer
and director or other person having authority with respect to such entity,
indicating all current titles held by each individual; its headquarters address,
telephone and facsimile numbers; its registered agent and/or office in its
jurisdiction of formation (if applicable); all foreign jurisdictions in which it
is qualified or registered to do business; the date it was qualified or
registered and its registered agent and/or office in each such jurisdiction; all
fictitious, assumed or other names of any type that are registered or used by it
or under which it has done business; and any name changes, recapitalizations,
mergers, reorganization or similar events since its date of formation. Accurate
and complete copies of articles or certificate of incorporation, articles of
association, memorandum of association, bylaws and other charter documents, each
as amended to date, of THAWTE and each of the THAWTE Subsidiaries have been
provided to Fenwick & West LLP, counsel to VeriSign. Exhibit 3.4 also lists,
with respect to THAWTE and each of the THAWTE Subsidiaries, each predecessor
corporation, partnership, limited liability company, joint venture or other
business entity of THAWTE and of the THAWTE subsidiary.

                       3.4.2  Authorization. Each of the THAWTE Subsidiaries is
                              -------------
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, operate and lease its properties and
<PAGE>

to carry on its business as now conducted and as proposed to be conducted, and
is qualified to transact business as a foreign corporation in each jurisdiction
in which its qualification as such is required. Exhibit 3.4 lists the material
assets, obligations and operations of the THAWTE Subsidiaries.

                       3.4.3  Securities. All issued and outstanding shares of
                              ----------
stock of the THAWTE Subsidiaries are validly issued, fully paid and
nonassessable and not subject to preemptive rights and are owned of record and
beneficially solely by THAWTE. The issued and outstanding shares of the THAWTE
Subsidiaries are not subject to any claim, lien, preemptive right, or right of
rescission (other than the rights of all companies organized under South African
company law to repurchase shares), and have been offered, issued, sold,
transferred and delivered in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of all applicable securities
laws. There are no options, warrants, convertible or other securities, calls,
commitments, conversion privileges, preemptive rights or other rights or
agreements outstanding to purchase or otherwise acquire (whether directly or
indirectly) any shares of any of the authorized but unissued capital stock of
any of the THAWTE Subsidiaries or any securities convertible into or
exchangeable for any shares of capital stock of any of the THAWTE Subsidiaries
or obligating any of the THAWTE Subsidiaries to grant, issue, extend, or enter
into any such option, warrant, convertible or other security, call, commitment,
conversion privilege, preemptive right or other right or agreement. No person or
entity holds or has any option, warrant or other right to acquire any issued and
outstanding shares of the capital stock of any of the THAWTE Subsidiaries from
any holder of shares of the capital stock of such entity. No shares of any of
the THAWTE Subsidiaries are reserved for issuance under any stock purchase,
stock option or other benefit plan. There are no voting agreements, voting
trusts, rights of first refusal or other restrictions (other than restrictions
on transfer under applicable securities laws) applicable to any of the issued
and outstanding securities of any of the THAWTE Subsidiaries.

                       3.4.4  Definition of "THAWTE". Solely for purposes of the
                              ---------------------
remainder of this Section 3 and Section 5, unless otherwise expressly provided
therein or where the context clearly otherwise requires, any reference made to
"THAWTE" shall be deemed to be a reference to, and to include, each of THAWTE
and each of the THAWTE Subsidiaries and the predecessors of each.

                 3.5   No Violation of Existing Agreements. Neither the
                       -----------------------------------
execution and delivery of this Agreement nor the consummation of the Exchange or
any of the other transactions contemplated hereby, nor the THAWTE Shareholder's
discussion or negotiation with VeriSign of the Exchange or any other transaction
contemplated hereby, will conflict with, or (with or without notice or lapse of
time, or both) result in a termination, breach, impairment or violation of: (i)
any provision of the memorandum and articles of association of THAWTE as
currently in effect; (ii) any national, provincial or foreign judgment, writ,
decree, order, statute, rule or regulation applicable to THAWTE or its assets or
properties; or (iii) any material instrument, agreement (other than the Entrust
Agreement), contract, letter of intent or commitment to which THAWTE is a party
or by which THAWTE or its assets or properties are or were bound, except
<PAGE>

such conflicts, terminations, breaches, impairments or violations as would not
have a Material Adverse Effect.

                 3.6   Litigation. As of the date hereof, there is no action,
                       ----------
suit, arbitration, mediation, proceeding, claim or investigation pending against
THAWTE (or against any officer or director of THAWTE or, to the best of the
knowledge of THAWTE and the THAWTE Shareholder, against any employee or agent of
THAWTE, in their capacity as such or relating to their employment, services or
relationship with THAWTE) before any court, administrative agency or arbitrator
that, if determined adversely to THAWTE (or any such officer, director, employee
or agent) may reasonably be expected to have a Material Adverse Effect on
THAWTE, nor, to the best of the THAWTE Shareholder's knowledge, has any such
action, suit, proceeding, arbitration, mediation, claim or investigation been
threatened. Except as would not have a Material Adverse Effect, and save for the
regulatory approvals required hereunder, there is no basis for any person, firm,
corporation or other entity, to assert a claim against THAWTE or VeriSign based
upon THAWTE's entering into this Agreement or consummating the Exchange; and
there is no basis for any person, firm, corporation or other entity, to assert a
claim against THAWTE based upon (a) any claims of ownership, rights to
ownership, or options, warrants or other rights to acquire ownership, of any
shares of the capital stock of THAWTE; or (b) any rights as a THAWTE
shareholder, including any option, warrant or preemptive rights or rights to
notice or to vote. To the knowledge of THAWTE, there is no judgment, decree,
injunction, rule or order of any governmental entity or agency, court or
arbitrator outstanding against THAWTE.

                 3.7   Taxes. THAWTE has timely filed all national and foreign
                       -----
tax returns required to be filed, has timely paid or provided for all taxes
required to be paid in respect of all periods for which returns have been filed,
has established an adequate accrual or reserve for the payment of all taxes
payable in respect of the periods subsequent to the periods covered by the most
recent applicable tax returns, has made all necessary estimated tax payments,
and has no material liability for taxes in excess of the amount so paid or
accruals or reserves so established. THAWTE is not delinquent in the payment of
any tax or in the filing of any tax returns, and no deficiencies for any tax
have been threatened, claimed, proposed or assessed. THAWTE has not received any
notification that any issues have been raised (and are currently pending) by any
taxing authority (including but not limited to any franchise, sales or use tax
authority) regarding THAWTE and no tax return of THAWTE has ever been audited by
any South African or foreign taxing agency or authority.

                 For the purposes of this Section, the terms "tax" and "taxes"
include South African and foreign income, alternative or add-on minimum income,
gains, franchise, excise, property, sales, use, employment, license, payroll
(including any taxes or similar payments required to be withheld from payments
of salary or other compensatory payments), ad valorem, payroll, stamp,
occupation, recording, value added or transfer taxes, governmental charges,
fees, customs duties, levies or assessments (whether payable directly or by
withholding), and, with respect to such taxes, any estimated tax, interest and
penalties or additions to tax and interest on such penalties and additions to
tax.

<PAGE>

                  VeriSign will not be required to deduct and withhold any
amount pursuant to Section 1445(a) of the Internal Revenue Code of 1986, as
amended.

          3.8  THAWTE Financial Statements. THAWTE was incorporated on
               ---------------------------
November 28, 1997. THAWTE's financial year ends on the last day of February.
THAWTE has delivered to VeriSign an unaudited balance sheet (the "Unaudited
Balance Sheet") as of November 30, 1999 (the "Balance Sheet Date") and an
unaudited income statement and unaudited cash flow statement, each for the nine
months ended November 30, 1999 (such balance sheet, income statement and cash
flow statement, collectively, the "Management Accounts") THAWTE has also
delivered to VeriSign THAWTE's audited balance sheet as of February 28, 1999(the
"Balance Sheet"), and an audited consolidated income statement, and an audited
consolidated cash flow for the financial year ended February 28, 1999 (all such
Management Accounts and financial statements of THAWTE are hereinafter
collectively referred to as the "THAWTE Financial Statements"). The THAWTE
Financial Statements (a) have been prepared in accordance with the books and
records of THAWTE, (b) fairly present the financial condition of THAWTE at the
dates therein indicated and the results of operations for the periods therein
specified and (c) have been prepared in accordance with generally accepted
accounting principles as applied in the Republic of South Africa ("South African
GAAP")applied on a consistent basis with prior periods. THAWTE has no material
debt, liability or obligation of any nature (whether intercompany or owed to
third parties), whether accrued, absolute, contingent or otherwise, and whether
due or to become due, except for (i) those shown on the Unaudited Balance Sheet
and (ii) those that may have been incurred after the Balance Sheet Date in the
ordinary course of THAWTE's business consistent with past. All reserves
established by THAWTE and set forth in the Unaudited Balance Sheet are
reasonably adequate. At the Balance Sheet Date, there were no material
contingent liabilities, as such term is used in South African GAAP, which are
not adequately provided for in the Balance Sheet as required by South African
GAAP.

          3.9  Title to Properties. THAWTE has good and marketable title to all
               -------------------
of its assets (including but not limited to those shown on the Balance Sheet),
free and clear of all liens, mortgages, security interests, claims, charges,
restrictions or encumbrances, except where the failure to hold such title would
not have a Material Adverse Effect. All machinery, vehicles, equipment and other
tangible personal property included in such assets and properties are in good
condition and repair, normal wear and tear excepted, and all leases of real or
personal property to which THAWTE is a party are fully effective and afford
THAWTE peaceful and undisturbed possession of the real or personal property that
is the subject of the lease. THAWTE is not in violation of any zoning, building,
safety or environmental ordinance, regulation or requirement or other law or
regulation applicable to the operation of owned or leased properties (the
violation of which would have a Material Adverse Effect on its business), nor
has THAWTE received any notice of violation with which it has not complied.
THAWTE owns its corporate offices and surrounding land (the "Real Property").

          3.10 Absence of Certain Changes. Since the Balance Sheet Date
               --------------------------
through the date hereof, there has not been with respect to THAWTE any:
<PAGE>

          (a)  material adverse change in the condition (financial or
otherwise), properties, assets, liabilities, businesses, operations, or results
of operations of THAWTE;

          (b)  amendments or changes in the memorandum and articles of
association of THAWTE;

          (c)  (i) incurrence, creation or assumption by THAWTE of any mortgage,
security interest, pledge, lien or other encumbrance on any of the assets or
properties of THAWTE or any material obligation or liability or any indebtedness
for borrowed money; or (ii) issuance or sale of, or change with respect to the
rights of, any debt or equity securities of THAWTE or any options or other
rights to acquire from THAWTE, directly or indirectly, any debt or equity
securities of THAWTE;

          (d)  payment or discharge of a lien or liability which lien or
liability was not either shown on the Balance Sheet or incurred in the ordinary
course of business after the Balance Sheet Date;

          (e)  purchase, license, sale or other disposition, or any agreement or
other arrangement for the purchase, license, sale or other disposition, of any
of the assets, properties or goodwill of THAWTE other than in the ordinary
course of its business consistent with its past practice;

          (f)  damage, destruction or loss, whether or not covered by insurance,
having (or likely with the passage of time to have) a Material Adverse Effect on
THAWTE;

          (g)  declaration, setting aside or payment of any dividend on, or the
making of any other distribution in respect of, the THAWTE Stock, any split,
combination or recapitalization of the THAWTE Stock or any direct or indirect
redemption, purchase or other acquisition of THAWTE Stock or any change in any
rights, preferences, privileges or restrictions of any issued and outstanding
security of THAWTE;

          (h)  change or increase in the compensation payable or to become
payable to any of the officers, employees, consultants or agents of THAWTE, or
in any bonus or pension, insurance or other benefit payment or arrangement
(including without limitation stock awards, stock appreciation rights or stock
option grants) made to or with any of such officers, employees, consultants or
agents except in connection with normal salary or performance reviews or
otherwise in the ordinary course of business consistent with THAWTE's past
practice;

          (i)  change with respect to the management, supervisory or other key
personnel of THAWTE;
<PAGE>

               (j)  obligation or liability incurred by THAWTE to any of its
officers, directors or the THAWTE Shareholder except in the ordinary course of
business consistent with THAWTE's past practice;

               (k)  making of any loan, advance or capital contribution to, or
any investment in, any officer, director or record or beneficial shareholder of
THAWTE;

               (l)  entering into, amendment of, relinquishment, termination or
non-renewal by THAWTE of any contract, lease, transaction, commitment or other
right or obligation other than in the ordinary course of its business consistent
with its past practice or, to THAWTE's knowledge, any written or oral indication
or assertion by the other party thereto of problems with THAWTE's services or
performance under such contract, lease, transaction, commitment or other right
or obligation or such other party's desire to so amend, relinquish, terminate or
not renew any such contract, lease, transaction, commitment or other right or
obligation;

               (m)  material change in the manner in which THAWTE extends
discounts or credits to customers or otherwise deals with its customers;

               (n)  entering into by THAWTE of any transaction, contract or
agreement or the conduct of business or operations other than in the ordinary
course of its business consistent with its past practices; or

               (o)  transfer or grant of a right under any THAWTE IP Rights (as
defined in Section 3.13 below), other than those transferred or granted in the
ordinary course of THAWTE's business consistent with THAWTE's past practice.

          3.11 Contracts and Commitments. Exhibit 3.11 sets forth, as of
               --------------------------
the date hereof, a list of each of the following written or oral contracts,
agreements, commitments or other instruments to which THAWTE is a party or to
which it or any of its assets or properties is bound:

               (a)  consulting or similar agreement under which THAWTE provides
any advice or services to a customer of THAWTE;

               (b)  continuing contract for the future purchase, sale, license,
provision or manufacture of products, material, supplies, equipment or services
requiring payment to or from THAWTE in an amount in excess of ZAR 300,000 per
annum which is not terminable on 90 days' or less notice without cost or other
liability to THAWTE or in which THAWTE has granted or received manufacturing
rights, most favored customer pricing provisions or exclusive marketing rights
relating to any product or services, group of products or services or territory;

               (c)  contract providing for the acquisition of software by
THAWTE, for the development of software for THAWTE, or the license of software
to THAWTE, which software is used or incorporated in any products currently
distributed by
<PAGE>

THAWTE or services currently provided by THAWTE or is contemplated to be used or
incorporated in any products to be distributed or services to be provided by
THAWTE (other than software generally available to the public at a per copy
license fee of less than ZAR 30,000);

               (d)  joint venture or partnership contract or agreement or other
agreement which has involved or is reasonably expected to involve a sharing of
profits or losses in excess of ZAR 300,000 per annum with any other party;

               (e)  contract or commitment for the employment of any officer,
employee or consultant of THAWTE or any other type of contract or understanding
with any officer, employee or consultant of THAWTE which is not immediately
terminable by THAWTE without cost or other liability, except as otherwise
provided by South African law;

               (f)  indenture, mortgage, trust deed, promissory note, loan
agreement, guarantee or other agreement or commitment for the borrowing of
money, for a line of credit or for a leasing transaction of a type required to
be capitalized in accordance with South African GAAP;

               (g)  lease or other agreement under which THAWTE is lessee of or
holds or operates any items of tangible personal property or real property owned
by any third party and under which payments to such third party exceed ZAR
150,000 per annum;

               (h)  agreement or arrangement for the sale of any assets,
properties, services or rights having a value in excess of ZAR 150,000, other
than in the ordinary course of business consistent with past practice, and
except as otherwise contemplated by this Agreement;

               (i)  agreement which restricts THAWTE from engaging in any aspect
of its business or competing in any line of business in any geographic area;

               (j)  THAWTE IP Rights Agreement (as defined in Section 3.13
below);

               (k)  agreement relating to the sale, issuance, grant, exercise,
award, purchase, repurchase or redemption of any shares of THAWTE Stock or any
options, warrants or other rights to purchase or otherwise acquire any such
shares of THAWTE Stock, other securities or options, warrants or other rights
therefor;

               (l)  contract with or commitment to any labor union; or

               (m)  other agreement, contract, commitment or instrument that is
material to the business of THAWTE or that involves a commitment by THAWTE in
excess of $25,000.

          A copy of each agreement or document required by this Section to be
listed on Exhibit 3.11 (collectively, the "THAWTE Material Agreements") has been
delivered to
<PAGE>

Fenwick & West LLP, VeriSign's counsel. No consent or approval of any third
party is required to ensure that, following the Closing, any THAWTE Material
Agreement shall continue to be in full force and effect without any breach or
violation thereof caused by virtue of the Exchange or by any other transaction
called for by this Agreement.

               3.12 No Default. THAWTE is not in breach or default of any
                    ----------
THAWTE Material Agreement. THAWTE is not a party to any contract, agreement or
arrangement which has had, or could reasonably be expected to have, a Material
Adverse Effect on THAWTE. THAWTE does not have any material liability for
renegotiation of government contracts or subcontracts, if any.

               3.13 Intellectual Property.
                    ---------------------

                    3.13.1    THAWTE owns, or has the irrevocable right to use,
sell or license all material Intellectual Property Rights (as defined below)
necessary or required for the conduct of its business as presently conducted
(such Intellectual Property Rights being hereinafter collectively referred to as
the "THAWTE IP Rights"), and such rights to use, sell or license are sufficient
for such conduct of its business. THAWTE is the legal and beneficial owner of
all rights, including all copyright and worldwide distribution rights, to those
certain computer software programs, including all object code, source code,
configurations, routines and algorithms contained therein with annotations and
related documentation, known as the THAWTE Roots together with all alterations,
modifications and reconfigurations thereof in all forms of expression, including
but not limited to, the source code, object code, flowcharts, block diagrams,
manuals and all other documentation no matter how stored, transmitted, read or
utilized and all copyrights, trade secrets, patents, inventions (whether
patentable or not), proprietary rights and intellectual property rights
associated therewith (collectively the "Software"). The term "THAWTE IP Rights"
includes, without limitation, the Software. Any and all rights to the Software
previously owned or held by third parties, including (but not limited to) the
THAWTE Subsidiaries have been transferred to THAWTE and are owned outright, free
and clear of any claims, liens, security interest, mortgages, encumbrances or
obligations, by THAWTE. Numerous parties worldwide hold distribution rights of
some sort to the Software. Some examples and descriptions of the arrangements by
which parties may hold such rights may be found on the Internet at
http://www.thawte.com/partners/contents.html.

                    3.13.2    The execution, delivery and performance of this
Agreement and the consummation of the Exchange and the other transactions
contemplated hereby will not constitute a material breach of or default under
any instrument, contract, license or other agreement governing any THAWTE IP
Right (the "THAWTE IP Rights Agreements") and will not cause the forfeiture or
termination, or give rise to a right of forfeiture or termination, of any THAWTE
IP Right or materially impair the right of THAWTE to use, sell, license, provide
or otherwise commercially exploit any THAWTE IP Right or portion thereof (except
where such breach, forfeiture or termination would not have a Material Adverse
Effect on THAWTE). Other than pursuant to agreements entered into in the
ordinary course of business between THAWTE and its representative offices, or to
resellers under the Chained Certification Authority Program,
<PAGE>

there are no royalties, honoraria, fees or other payments payable by THAWTE to
any person by reason of the ownership, use, license, sale, exploitation or
disposition of the THAWTE IP Rights.

               3.13.3    Neither the manufacture, marketing, license, sale,
furnishing or intended use of any product or service currently licensed,
utilized, sold, provided or furnished by THAWTE or currently under development
by THAWTE has violated or now violates any license or agreement between THAWTE
and any third party or, to the knowledge of THAWTE or the THAWTE Shareholder
infringes or misappropriates any Intellectual Property Right of any other party;
and there is no pending or, to the best knowledge of THAWTE and the THAWTE
Shareholder, threatened claim or litigation contesting the validity, ownership
or right to use, sell, license or dispose of any THAWTE IP Right nor, to the
best knowledge of THAWTE and the THAWTE Shareholder, is there any basis for any
such claim, nor has THAWTE received any notice asserting that any THAWTE IP
Right or the proposed use, sale, license or disposition thereof conflicts or
will conflict with the rights of any other party, nor, to the best knowledge of
THAWTE and the THAWTE Shareholder, is there any basis for any such assertion. To
the best knowledge of THAWTE and the THAWTE Shareholder, no employee or agent of
or consultant to THAWTE is in violation of any term of any employment contract,
patent disclosure agreement, noncompetition agreement, non-solicitation
agreement or any other contract or agreement, or any restrictive covenant
relating to the right of any such employee, agent or consultant to be employed
thereby, or to use trade secrets or proprietary information of others, and the
employment of such employees or engagement of such agents and consultants does
not subject THAWTE to any liability.

               3.13.4    THAWTE is currently taking reasonable and practicable
steps, detailed on Schedule 3.13.4, designed to protect, preserve and maintain
the secrecy and confidentiality of all material THAWTE IP Rights and all
THAWTE's proprietary rights therein. All officers, employees, agents and
consultants of THAWTE having access to proprietary information have executed and
delivered to THAWTE an agreement regarding the protection of such proprietary
information and the assignment of inventions to THAWTE in the form provided to
counsel for VeriSign and copies of all such agreements, executed by all such
persons, have been delivered to VeriSign's counsel.

               3.13.5    Exhibit 3.13 contains a list of all THAWTE IP Rights
                         ------------
and all worldwide applications, registrations, filings and other formal actions
made or taken pursuant to national, provincial and foreign laws by THAWTE to
secure, perfect or protect its interest in THAWTE IP Rights, including, without
limitation, all patents, patent applications, copyrights (whether or not
registered), copyright applications, trademarks, service marks and trade names
(whether or not registered) and trademark, service mark and trade name
applications. Exhibit 3.13 lists, with respect to each item of THAWTE IP Rights,
the entity (THAWTE or one of the THAWTE Subsidiaries) which owns or holds such
IP Rights.

               3.13.6    As used herein, the term "Intellectual Property Rights"
means, collectively, all worldwide industrial and intellectual property rights,
including, without limitation, patents, patent applications, patent rights,
trademarks, trademark applications, trade dress rights, trade names, service
marks, service mark applications, copyrights, copyright
<PAGE>

applications, mask work rights, mask work registrations, franchises, licenses,
inventions, trade secrets, know-how, customer lists, proprietary processes and
formulae, software source and object code, algorithms, architecture, structure,
display screens, layouts, inventions, development tools and all documentation
and media constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.

               3.14 Compliance with Laws. THAWTE has complied, and is now and
                    --------------------
at the Closing Date will be in compliance, in all material respects, with all
applicable national, provincial, or foreign laws, ordinances, regulations, and
rules, and all orders, writs, injunctions, awards, judgments, and decrees
applicable to THAWTE or to THAWTE's assets, properties, and business, except
where the failure to so comply would not have a Material Adverse Effect. THAWTE
holds all permits, licenses and approvals from, and has made all filings with,
third parties, including government agencies and authorities, that are necessary
in connection with THAWTE's present business, except those where failure to do
so would not have a Material Adverse Effect.

               3.15 Certain Transactions and Agreements. except as contemplated
                    -----------------------------------
by this Agreement, none of the officers, directors or the THAWTE Shareholder of
THAWTE, nor any member of their immediate families, has any direct or indirect
ownership interest in any firm or corporation that competes with, or does
business with, or has any contractual arrangement with THAWTE (except with
respect to any interest in less than one percent (1%) of the stock of any
corporation whose stock is publicly traded). None of said officers, directors,
employees or the THAWTE Shareholder or any member of their immediate families,
is directly or indirectly interested in any contract or informal arrangement
with THAWTE, except for normal compensation for services as an officer, director
or employee thereof that have been disclosed to VeriSign. Except as contemplated
by this Agreement, none of said officers, directors, employees or the THAWTE
Shareholder or family members has any interest in any property, real or
personal, tangible or intangible (including but not limited to any THAWTE IP
Rights or any other Intellectual Property Rights) that is used in or that
pertains to the business of THAWTE, except for the normal rights of a
shareholder.

               3.16 Employees.
                    ---------

                    3.16.1    THAWTE is in compliance in all material respects
with all applicable laws, agreements and contracts relating to employment,
employment practices, wages, hours, and terms and conditions of employment,
including, but not limited to, employee compensation matters in each of the
jurisdictions in which it conducts business. A list of all employees, officers
and consultants of THAWTE, their title, date of hire, employer entity and
current compensation is set forth on Exhibit 3.16.1, which has been delivered to
                                     --------------
VeriSign. THAWTE does not have any employment contracts or consulting agreements
currently in effect that are not terminable at will (other than agreements with
the sole purpose of providing for the confidentiality of proprietary information
or assignment of inventions), other than as may be required by South African
law.
<PAGE>

                3.16.2    THAWTE (i) has never been and is not now subject to a
union organizing effort, (ii) is not subject to any collective bargaining
agreement with respect to any of its employees, (iii) is not subject to any
other contract, written or oral, with any trade or labor union, employees'
association or similar organization, and (iv) does not have any current labor
disputes. THAWTE has good labor relations, and has no knowledge of any facts
indicating that the consummation of the transactions contemplated hereby will
have a material adverse effect on such labor relations. As of the date hereof,
neither THAWTE nor the THAWTE Shareholder has any knowledge that any key
employee of THAWTE intends to leave the employ of THAWTE.

                3.16.3    THAWTE does not have any "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). THAWTE has no pension plan which constitutes, or has since
the enactment of ERISA constituted, a "multi-employer plan" as defined in
Section 3(37) of ERISA. No THAWTE pension plans are subject to Title IV of
ERISA. THAWTE does not have any employee benefit plans that are subject to
statutory regulation under the laws of the Republic of South Africa.

               3.16.4    Exhibit 3.16.4 lists each employment, severance or
                         --------------
other similar contract, arrangement or policy, each "employee benefit plan" as
defined in Section 3(3) of ERISA (if any) and each plan or arrangement (written
or oral) providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which is entered into, maintained or
contributed to by THAWTE and covers any employee or former employee or
consultant or former consultant of THAWTE. Such contracts, plans and
arrangements as are described in this Section 3.16.4 are hereinafter
collectively referred to as the "THAWTE Benefit Arrangements." The THAWTE
Benefit Arrangement has been maintained in compliance in all material respects
with its terms and with the requirements prescribed by any and all laws,
statutes, orders, rules and regulations that are applicable to such THAWTE
Benefit Arrangement. THAWTE has delivered to VeriSign and its counsel, Fenwick &
West LLP, a complete and correct copy and summary description of the THAWTE
Benefit Arrangement.

               3.16.5    There has been no amendment to, written interpretation
or announcement (whether or not written) by THAWTE relating to, or change in
employee participation or coverage under, any THAWTE Benefit Arrangement that
would increase materially the expense of maintaining such THAWTE Benefit
Arrangement above the level of the expense incurred in respect thereof for
THAWTE's fiscal year ended February 28, 1999.

               3.16.6    The group health plans (as defined in Section 4980B(g)
of the Code) that benefit employees of THAWTE are in compliance, in all material
respects, with the continuation coverage requirements of Section 4980B of the
Code as such requirements affect THAWTE and its employees. As of the Closing
Date, there will be no material outstanding, uncorrected violations under the
Consolidation Omnibus Budget Reconciliation Act of 1985, as
<PAGE>

amended ("COBRA"), with respect to any of the THAWTE Benefit Arrangements,
covered employees, or qualified beneficiaries that could result in a Material
Adverse Effect on THAWTE, or in a material adverse effect on the business,
operations or financial condition of VeriSign as its successor. THAWTE has
provided, or shall have provided prior to the Closing, to individuals entitled
thereto, all required notices and coverage pursuant to Section 4980B of COBRA,
with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code) occurring prior to and including the Closing Date, and no material amount
payable on account of Section 4980B of the Code has been incurred with respect
to any current or former employees of THAWTE (or their beneficiaries).

               3.16.7    No benefit payable or which may become payable by
THAWTE pursuant to any THAWTE Benefit Arrangement or as a result of or arising
under this Agreement shall constitute an "excess parachute payment" (as defined
in Section 280G(b)(1) of the Code) which is subject to the imposition of an
excise tax under Section 4999 of the Code or which would not be deductible by
reason of Section 280G of the Code. THAWTE is not a party to any (a) agreement
(other than as described in (b) below) with any executive officer or other key
employee thereof (i) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving THAWTE in
the nature of any of the transactions contemplated by this Agreement, (ii)
providing any term of employment or compensation guarantee, or (iii) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment, or (b)
agreement or plan, including, without limitation, any stock option plan, stock
appreciation rights plan or stock purchase plan, any of the benefits of which
will be materially increased, or the vesting of benefits of which will be
materially accelerated, by the occurrence of the Exchange or any of the other
transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.

               3.17 Brokers.  [COMPLETE]
                    -------

               3.18 Insurance. Exhibit 3.20 hereto lists all fire and casualty,
                    ---------  ------------
general liability, business interruption, product liability, errors and
omissions, and sprinkler and water damage insurance maintained by THAWTE.

               3.19 Environmental Matters.
                    ---------------------

                    3.19.1 During the period that THAWTE has leased or owned its
respective properties or owned or operated any facilities, there have been no
disposals, releases or threatened releases of Hazardous Materials (as defined
below) on, from or under such properties or facilities that resulted from any
act or omission of THAWTE or any of its employees, agents or invitees. The
THAWTE Shareholder has no knowledge of any presence, disposals, releases or
threatened releases of Hazardous Materials on, from or under any of such
properties or facilities, which may have occurred prior to THAWTE having taken
possession of any of such properties or facilities. For the purposes of this
Agreement, the terms "disposal," "release," and "threatened release" shall have
the definitions assigned thereto by the
<PAGE>

Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. (S) 9601 et seq., as amended ("CERCLA"). For the purposes of this
Agreement "Hazardous Materials" shall mean any hazardous or toxic substance,
material or waste which is or becomes prior to the Closing regulated under, or
defined as a "hazardous substance," "pollutant," "contaminant," "toxic
chemical," "hazardous materials," "toxic substance" or "hazardous chemical"
under (a) CERCLA; (b) any similar federal, state or local law; or (c)
regulations promulgated under any of the above laws or statutes.

               3.19.2    None of the properties or facilities of THAWTE is in
violation of any national or provincial, ordinance, regulation or order relating
to industrial hygiene or to the environmental conditions on, under or about such
properties or facilities, including, but not limited to, soil and ground water
condition, except for such violations as would not have a Material Adverse
Effect. During the time that THAWTE has owned or leased its properties and
facilities, neither THAWTE nor, to the best knowledge of THAWTE and the THAWTE
Shareholder, any third party, has used, generated, manufactured or stored on,
under or about such properties or facilities or transported to or from such
properties or facilities any Hazardous Materials, other than THAWTE's lawful use
of standard office supplies customarily used in office environments that contain
legally permitted amounts of Hazardous Materials that would have no Material
Adverse Effect.

               3.19.3    During the time that THAWTE has owned or leased its
properties and facilities, there has been no litigation brought or threatened
against THAWTE, or, to the best knowledge of THAWTE and the THAWTE Shareholder,
against any lessor or owner of real property leased by THAWTE, or any settlement
reached by THAWTE or the THAWTE Shareholder with any party or parties alleging
the presence, disposal, release or threatened release of any hazardous materials
on, from or under any of such properties or facilities.

          3.20 Product Warranties and Product Liability Claims.
               -----------------------------------------------

               (a)  All products sold, serviced or distributed by THAWTE and all
services provide by THAWTE at any time prior to the Closing Date have been in
conformance in all material respects with all applicable contractual commitments
and all express or implied warranties of THAWTE and no material liability exists
for replacement thereof or other damages in connection with such sales or
deliveries or services at any time prior to the Closing Date (except as may be
reflected or expressly reserved for in the Latest Balance Sheet).

               (b)  The warranty and repair Claims with respect to the products
made, designed and sold by THAWTE and all services provided by THAWTE as part of
the Business prior to the Closing Date have been administered by THAWTE and have
consisted solely of routine warranty and repair Claims for the return of
defective or non-conforming merchandise, which Claims have individually and in
the aggregate been of an immaterial nature. There exist no Claims against THAWTE
and, to the knowledge of the THAWTE Shareholder, there exists no reasonable
basis for any Claims against THAWTE for injury to Persons or property suffered
by any Person as a result of the sale or use of any product made, designed or
sold by THAWTE
<PAGE>

or any service provided by THAWTE prior to the Closing Date, including, but not
limited to, Claims arising out of the defective or unsafe nature of any
products.

     4.   REPRESENTATIONS AND WARRANTIES OF VERISIGN

          VeriSign hereby represents and warrants each of the following
representations and statements in this Section 4 are true and correct:

          4.1  Organization and Good Standing. VeriSign is a corporation
               ------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has the corporate power and authority to own, operate and
lease its properties and to carry on its business as now conducted and as
proposed to be conducted.

          4.2  Power, Authorization and Validity.
               ---------------------------------

               4.2.1     VeriSign has the right, power and authority to enter
into, execute and perform its obligations under this Agreement and the VeriSign
Ancillary Agreements and to consummate the Exchange. The execution, delivery and
performance of this Agreement and the VeriSign Ancillary Agreements by VeriSign
have been duly and validly approved and authorized by all necessary action on
the part of VeriSign and VeriSign's Board of Directors.

               4.2.2     No filing, authorization, consent, approval or order,
governmental or otherwise, is necessary or required to enable VeriSign to enter
into this Agreement and the VeriSign Ancillary Agreements and consummate the
Exchange. No filing, authorization, consent, approval or order, governmental or
otherwise, is necessary or required to enable VeriSign to perform those
obligations under this Agreement and the VeriSign Ancillary Agreements that are
to be performed after the consummation of the Exchange except for (a) any
filings with the Securities and Exchange Commission and other applicable
securities authorities contemplated by the Registration Rights Agreement
attached hereto as Exhibit 2.1.3, and (b) such filings as may be required to
comply with applicable securities laws in connection with the Exchange itself.

               4.2.3     This Agreement and the VeriSign Ancillary Agreements
are, or when executed by VeriSign will be, valid and binding obligations of
VeriSign, enforceable in accordance with their respective terms, except as to
the effect, if any, of (a) applicable bankruptcy and other similar laws
affecting the rights of creditors generally and (b) rules of law governing
specific performance, injunctive relief and other equitable remedies.

          4.3  No Violation of Material Agreements. Neither the execution
               -----------------------------------
and delivery of this Agreement nor any VeriSign Ancillary Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with, or
(with or without notice or lapse of time, or both) result in: (a) a termination,
breach, impairment or violation of (i) any provision of the Certificate of
Incorporation or Bylaws of VeriSign, as currently in effect or (ii) any federal,
state, local or foreign judgment, writ, decree, order, statute, rule or
regulation to which VeriSign or its assets or properties is subject; or (b) a
termination, or a material breach, impairment or violation, of any material
instrument or contract to which VeriSign is a party or by which VeriSign or its
<PAGE>

properties are bound. VeriSign is not required to obtain the consent of any
third party to consummate the Exchange.

          4.4  Disclosure. VeriSign has made available to THAWTE a disclosure
               ----------
package consisting of VeriSign's most recent Form 10-K for its fiscal year ended
December 31, 1998, all Forms 10-Q filed by VeriSign with the SEC after the date
of such Form 10-K and before the Agreement Date, all Forms 8-K and 8-K/A filed
by VeriSign with the SEC after the date of its most recent Form 10-Q and the
Proxy Statement for VeriSign's annual meeting of stockholders held on May 27,
1999 (the "VeriSign Disclosure Package"). As of their respective filing dates,
documents filed by VeriSign with the SEC including, without limitation, any
financial statements or schedules included or incorporated therein and included
in the VeriSign Disclosure Package complied in all material respects with the
requirements of the 1933 Act or the 1934 Act, as the case may be. The
consolidated financial statements of VeriSign included in such SEC documents
have been prepared in accordance with the books and records of VeriSign and
fairly present the financial condition of VeriSign and its consolidated
subsidiaries as of such date and the consolidated results of operations and cash
flows for the periods then ended. The consolidated financial statements in such
SEC documents have been prepared in accordance with United States generally
accepted accounting principles consistently applied during the periods involved,
except as otherwise disclosed in the notes to such financial statements. The
VeriSign Disclosure Package, this Agreement, the exhibits and schedules hereto,
and any certificates or documents to be delivered to THAWTE pursuant to this
Agreement, when taken together, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not misleading.

          4.5  Financial Condition. There has been no material adverse change in
               -------------------
the financial condition or business of VeriSign, taken as whole, since the date
of the most recent financial statements included in the VeriSign Disclosure
Package.

          4.6  Validity of Shares. The shares of VeriSign Common Stock to be
               ------------------
issued pursuant to the Exchange shall, when issued: (a) be duly authorized,
validly issued, fully paid and nonassessable and free of liens and encumbrances
created by VeriSign, and (b) be free and clear of any transfer restrictions,
liens and encumbrances except for restrictions on transfer under applicable
United States securities laws, including Rule 144 promulgated under the 1933
Act.

          4.7  South Afican Assets and Revenues. VeriSign's South African
               --------------------------------
assets and revenues are below the thresholds that would require a filing with
the South African Competition Commission.

     5.   COVENANTS OF THE THAWTE SHAREHOLDER

          During the period from the Agreement Date until the earlier to occur
of (i) the Closing or (ii) the termination of this Agreement in accordance with
Section 10, the THAWTE Shareholder hereby covenants and agrees with VeriSign as
follows:
<PAGE>

          5.1  Advice of Changes. The THAWTE Shareholder will promptly advise
               -----------------
VeriSign in writing (a) of any event occurring subsequent to the date of this
Agreement that would render any representation or warranty of the THAWTE
Shareholder contained in Section 3 of this Agreement, if made on or as of the
date of such event or the Closing Date, untrue or inaccurate in any material
respect and (b) of any material adverse change in THAWTE's assets, business,
results of operations or financial condition. The THAWTE Shareholder shall cause
THAWTE to deliver to VeriSign within thirty (30) days after the end of each
quarterly accounting period ending after the Agreement Date and before the
Closing Date, an unaudited balance sheet and statement of operations, which
financial statements shall be prepared in the ordinary course of business
consistent with THAWTE's past practice (except that such financial statements
shall be prepared in accordance with South African GAAP), in accordance with
THAWTE's books and records and South African GAAP and shall fairly present the
financial position of THAWTE on a consolidated basis as of their respective
dates and the results of THAWTE's operations on a consolidated basis for the
periods then ended.

          5.2  Maintenance of Business. The THAWTE Shareholder shall cause
               -----------------------
THAWTE to carry on and preserve its business and its relationships with
customers, suppliers, employees, consultants and others in substantially the
same manner as it has prior to the date hereof. If the THAWTE Shareholder
becomes aware of a material deterioration in the relationship of THAWTE with any
customer, supplier, key employee, consultant or business partner, he will
promptly bring such information to the attention of VeriSign in writing and, if
requested by VeriSign, will exert his best efforts to restore the relationship.

          5.3  Conduct of Business. The THAWTE Shareholder shall cause THAWTE to
               -------------------
continue to conduct its business and maintain its business relationships in the
ordinary and usual course and to not, without the prior written consent of the
President of VeriSign:

               (a)  borrow or lend any money other than advances to in the
ordinary course of THAWTE's business consistent with THAWTE's past practice;

               (b)  purchase or sell shares or other equity interest in any
corporation or other business or enter into any transaction or agreement not in
the ordinary course of THAWTE's business consistent with THAWTE's past practice;

               (c)  encumber, or permit to be encumbered, any of its assets;

               (d)  sell, transfer or dispose of any of its assets except in the
ordinary course of THAWTE's business consistent with THAWTE's past practice;

               (e)  enter into any material lease or contract for the purchase
or sale of any property, whether real or personal, tangible or intangible,
except as otherwise contemplated by this Agreement, or except in the ordinary
course of business and consistent with past practice;

               (f)  pay any bonus, increased salary or special remuneration to
any officer, employee or consultant (except for normal salary increases
consistent with past practices not to exceed 5% of such officer's, employee's or
consultant's base annual compensation, except
<PAGE>

pursuant to existing arrangements previously disclosed to and approved in
writing by VeriSign) or enter into any new employment or consulting agreement
with any such person;

               (g)  change any of its accounting;

               (h)  declare, set aside or pay any cash or stock dividend or
other distribution in respect of any of its shares, redeem, repurchase or
otherwise acquire any of its capital stock or other securities, pay or
distribute any cash or property to any THAWTE shareholder or security holder or
make any other cash payment to any shareholder or security holder of THAWTE that
is unusual, extraordinary, or not made in the ordinary course of THAWTE's
business consistent with THAWTE's past practice;

               (i)  amend or terminate any contract, agreement or license to
which it is a party;

               (j)  guarantee or act as a surety for any obligation of any third
party;

               (k)  waive or release any material right or claim except in the
ordinary course of business, consistent with past practice or agree to any audit
assessment by any tax authority or file any federal or state income or franchise
tax return unless copies of such returns have been delivered to VeriSign for its
review prior to filing;

               (l)  issue, sell, create or authorize any shares of its capital
stock of any class or series or any other of its securities, or issue, grant or
create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments to issue shares of its capital stock or
securities ultimately exchangeable for, or convertible into, shares of its
capital stock;

               (m)  subdivide or split or combine or reverse split the issued
and outstanding shares of its capital stock of any class or enter into any
recapitalization affecting the number of issued and outstanding shares of its
capital stock of any class or affecting any other of its securities;

               (n)  merge, consolidate or reorganize with, or acquire, any
entity or enter into any negotiations, discussions or agreement for such
purpose;

               (o)  amend its charter documents;

               (p)  enter into any license or agreement to license any of its
technology or Intellectual Property Rights;

               (q)  change any insurance;

               (r)  agree to do any of the things described in the preceding
clauses 5.3(a) through 5.3(q).

          5.4  Regulatory Approvals. The THAWTE Shareholder shall cause
               --------------------
THAWTE to and the THAWTE Shareholder will, promptly execute and file, or join in
the execution and
<PAGE>

filing, of any application or other document that may be necessary in order to
obtain the authorization, approval or consent of any governmental body, federal,
state, local or foreign, which may be reasonably required, or which VeriSign may
reasonably request, in connection with the consummation of the transactions
contemplated by this Agreement, provided that, other than Exchange Control
Approval, VeriSign shall pay the costs associated with such filings or
applications. The THAWTE Shareholder shall cause THAWTE, its officers, directors
and employees to, and the THAWTE Shareholder, will use their respective best
efforts to promptly obtain, and to cooperate with VeriSign to promptly obtain,
all such authorizations, approvals and consents.

          5.5  Necessary Consents. The THAWTE Shareholder shall cause THAWTE,
               ------------------
its officers and directors to, and the THAWTE Shareholder will, use their
respective best efforts to promptly obtain such written consents and take such
other actions as may be necessary or appropriate in addition to those set forth
in Section 5.4 to allow the consummation of the transactions contemplated hereby
and to allow VeriSign to carry on THAWTE's business after the Closing.

          5.6  Litigation. The THAWTE Shareholder shall cause THAWTE to notify
               ----------
VeriSign in writing promptly after learning of any action, suit, arbitration,
mediation, proceeding or investigation by or before any court, arbitrator or
arbitration panel, board or governmental agency, initiated by or against it, or
known by it to be threatened against it or any of its directors, officers,
employees or consultant in their capacity as such.

          5.7  No Other Negotiations. From the Agreement Date until the earlier
               ---------------------
of termination of this Agreement in accordance with Section 10 or the
consummation of the Exchange, the THAWTE Shareholder shall cause THAWTE, its
officers, directors and employees and the THAWTE Shareholder will not, and will
not authorize, encourage or permit, any officer, director, employee, shareholder
or affiliate of THAWTE, or any other person, on its or their behalf to, directly
or indirectly, solicit or encourage any offer from any party or consider any
inquiries or proposals received from any other party, participate in any
negotiations regarding, or furnish to any person any information with respect
to, or otherwise cooperate with, facilitate or encourage any effort or attempt
by any person (other than VeriSign), concerning any agreement or transaction
regarding the possible disposition of all or any substantial portion of the
business, assets or capital stock of THAWTE or any THAWTE Subsidiary by merger,
consolidation, reorganization, sale of assets, sale of stock, exchange, tender
offer or any other form of business combination ("Alternative Transaction"). The
THAWTE Shareholder will, and will cause THAWTE to, promptly notify VeriSign
orally and in writing of any such inquiries or proposals. In addition, neither
THAWTE, nor the THAWTE Shareholder nor any THAWTE Subsidiary, shall execute,
enter into or become bound by (a) any letter of intent or agreement or
commitment between THAWTE and/or the THAWTE Shareholder and/or any THAWTE
Subsidiary, on the one hand, and any third party, on the other hand, that is
related to an Alternative Transaction or (b) any agreement or commitment between
THAWTE and/or the THAWTE Shareholder and/or any THAWTE Subsidiary, on the one
hand, and a third party, on the other hand, providing for an Alternative
Transaction.
<PAGE>

          5.8  Access to Information. Until the Closing, the THAWTE Shareholder
               ---------------------
shall cause THAWTE to allow VeriSign and its agents reasonable access to the
files, books, records and offices of THAWTE, including, without limitation, any
and all information relating to THAWTE's taxes, commitments, contracts, leases,
licenses, and real, personal and intangible property and financial condition,
and subject to THAWTE's confidentiality obligations to third parties. The THAWTE
Shareholder shall cause THAWTE to cause its accountants to cooperate with
VeriSign and its agents in making available all financial and tax information
reasonably requested, including without limitation the right to examine all
working papers pertaining to all financial statements and tax returns, prepared
or audited by such accountants, provided that such access to information does
not unreasonably interfere with the operations of THAWTE.

          5.9  Satisfaction of Conditions Precedent. The THAWTE Shareholder
               ------------------------------------
shall cause THAWTE, its and directors and officers to, and the THAWTE
Shareholder will, use their respective best efforts to satisfy or cause to be
satisfied all the conditions precedent which are set forth in Section 9, and the
THAWTE Shareholder shall cause THAWTE, its directors and officers to, and the
THAWTE Shareholder will, use their respective best efforts to cause the
transactions contemplated by this Agreement to be consummated; and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on
THAWTE's part in order to effect the transactions contemplated hereby.

          5.10 Securities Laws. The THAWTE Shareholder shall cause THAWTE to,
               ---------------
and the THAWTE Shareholder shall, use their best efforts to assist VeriSign to
the extent necessary to comply with the securities laws of all jurisdictions
(U.S. and foreign) which are applicable in connection with the Exchange,
provided that all costs associated with such compliance, other than Exchange
Control Approval, shall be borne by VeriSign.

          5.11 Termination of Registration and Voting Rights. The THAWTE
               ---------------------------------------------
Shareholder shall cause all registration rights agreements and voting agreements
applicable to or affecting any issued and outstanding shares or other securities
of THAWTE (if any) to be duly terminated and canceled by THAWTE by no later than
the Closing.

          5.12 Invention Assignment and Confidentiality Agreements. The THAWTE
               ---------------------------------------------------
Shareholder shall cause THAWTE to obtain from each employee, agent and
consultant of THAWTE who has had access to any software, technology or
copyrightable, patentable or other proprietary works or intellectual property
owned or developed by THAWTE or other Intellectual Property Rights, or to any
other confidential or proprietary information of THAWTE or its clients, an
invention assignment and confidentiality agreement in substantially the form of
the agreement provided to counsel to VeriSign, duly executed by such employee,
agent or consultant and delivered to THAWTE.

          5.13 Non-Competition and Consulting Agreements. The THAWTE Shareholder
               -----------------------------------------
shall cause THAWTE to use its commercially reasonable efforts to cause the
Restrained Persons to execute and deliver to VeriSign at the Closing a Non-
Competition Agreement in favor of VeriSign in the form attached hereto as
Exhibit 9.9A (the "Non-
- ------------
<PAGE>

Competition Agreement"), the consideration for which shall be the payment to
such Restrained Persons and the effectiveness of which shall be conditioned on
the satisfaction of the conditions in Section 2.1.4. The THAWTE Shareholder
shall also execute and deliver to VeriSign the Non-Competition Agreement in the
form of Exhibit 9.9B at the Closing. The THAWTE Shareholder shall execute and
        ------------
deliver to VeriSign at the Closing a Consulting Agreement in the form attached
hereto as Exhibit 9.10 (the "Consulting Agreement").
          ------------

                  5.14  Quarter Financials. Prior to Closing, the THAWTE
                        ------------------
Shareholder shall cause THAWTE to deliver to VeriSign THAWTE's unaudited balance
sheet as of November 30, 1999 and THAWTE's unaudited consolidated statement of
operations, consolidated statement of cash flows and consolidated statement of
Shareholder' equity for the nine months ended November 30, 1999 prepared in
accordance South African GAAP (the "Interim Financials").

                  5.15  Closing of Exchange. The THAWTE Shareholder shall cause
                        -------------------
THAWTE not to, and the THAWTE Shareholder shall not, refuse to effect the
Exchange if, on or before the Closing Date, all the conditions precedent to
their obligations to effect the Exchange under Section 8 hereof have been
satisfied or, in their sole discretion, been waived by them.

                  5.16  Consultants to Become Employees. The THAWTE Shareholder
                        -------------------------------
shall cause THAWTE and its officers to use their commercially reasonable efforts
to cause those persons who are designated by VeriSign to THAWTE in writing and
who are currently performing services for THAWTE and the THAWTE Subsidiaries as
consultants to become employees of THAWTE and/or the applicable THAWTE
Subsidiary prior to the Closing on terms and conditions, subject to South
African labor legislation, reasonably satisfactory to VeriSign.

                  [5.17 Delivery of THAWTE Financial Statements. Prior to the
                        ----------------------------------------
Closing, and as soon as practicable following the execution of this Agreement,
the THAWTE Shareholder shall cause THAWTE to deliver to VeriSign the audited
THAWTE Financial Statements referred to in Section 3.8 hereof.]

                  5.18  Real Property Purchase Agreement. The THAWTE Shareholder
                        --------------------------------
shall cause THAWTE to, and the THAWTE Shareholder shall, have entered into an
agreement, on terms that are commercially reasonable and reasonably acceptable
to VeriSign, for the purchase by the THAWTE Shareholder of the Real Property.
The price for the Real Property shall be its fair market value established by an
appraiser experienced in the appraisal of property like the Real Property.

             6.   VERISIGN COVENANTS

                  During the period from the Agreement Date until the earlier to
occur of (i) the Closing or (ii) the termination of this Agreement in accordance
with Section 10, VeriSign covenants and agrees as follows:

                  6.1  Advice of Changes. VeriSign will promptly advise the
                       -----------------
THAWTE Shareholder in writing (a) of any event occurring subsequent to the date
of this Agreement that
<PAGE>

would render any representation or warranty of VeriSign contained in this
Agreement, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material respect and (b) of any material adverse
change in VeriSign's business, results of operations or financial condition.

                  6.2 Regulatory Approvals. VeriSign will execute and file, or
                      --------------------
join in the execution and filing, of any application or other document that may
be necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement in accordance with the terms of this Agreement. VeriSign will
use its best efforts to obtain all such authorizations, approvals and consents.

                  6.3 Satisfaction of Conditions Precedent. VeriSign will use
                      ------------------------------------
its best efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Section 8, and VeriSign will use its best
efforts to cause the Exchange and the transactions contemplated by this
Agreement to be consummated in accordance with the terms of this Agreement, and,
without limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the transactions contemplated hereby. In particular,
VeriSign will use its best efforts to cause the Exchange to become effective in
accordance with this Agreement by January 31, 1999.

                  6.4 Securities Laws. VeriSign shall take such steps as may be
                      ---------------
necessary to comply with the securities and Blue Sky laws of all jurisdictions
(U.S. or foreign) which are applicable in connection with the Exchange, with the
cooperation and assistance of THAWTE and the THAWTE Shareholder.

                  6.5 Nasdaq National Market Listing. VeriSign shall cause the
                      ------------------------------
shares of VeriSign Common Stock issuable to the THAWTE Shareholder in the
Exchange to be authorized for listing on the Nasdaq National Market prior to the
Closing.

                  6.6 Employee Benefits. As soon as practicable after the
                      -----------------
Agreement Date, VeriSign and THAWTE shall confer and work in good faith to agree
upon a plan under which THAWTE employees will be covered either by (a)
VeriSign's employee benefits plans or (b) THAWTE's employee benefit plans, with
such decision to be made no later than six (6) months following the Closing, in
a manner that results in minimal disruption to the continuing operations of
THAWTE, and minimal cost to VeriSign.

                  6.7 Closing of Exchange. VeriSign shall not refuse to effect
                      -------------------
the Exchange if, on or before the Closing Date, all the conditions precedent to
their obligations to effect the Exchange under Section 9 hereof have been
satisfied or, in its sole discretion, been waived by it.

                  6.8 VeriSign Undertaking Regarding Section 18(c) of the
                      ---------------------------------------------------
Entrust Agreement. Immediately after the execution of this Agreement, VeriSign
- -----------------
shall deliver to Entrust a written undertaking ("Undertaking") by VeriSign to
cause THAWTE to fulfill THAWTE's obligations
<PAGE>

under the Entrust Agreement. The Undertaking shall enter into force and effect
on the Closing Date.

          7.      CLOSING MATTERS

                  7.1 The Closing. Subject to termination of this Agreement as
                      -----------
provided in Section 10 below, the closing of the transactions for consummation
of the Exchange (the "Closing") will take place at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Alto, California 94306 at 10:00 a.m., Pacific
Standard Time on January 17, 2000 or on such other date on or before the
Termination Date (as defined in Section 10.1.2) as VeriSign and the THAWTE
Shareholder may mutually agree upon in writing after which the satisfaction or
waiver of the conditions to Closing set forth in Sections 8 and 9 hereof have
been satisfied and/or waived in accordance with this Agreement (the "Closing
Date").

                  7.2 Exchanges at the Closing.
                      ------------------------

                      7.2.1 At the Closing, (a) the THAWTE Certificates shall be
exchanged for the Exchange Shares, evidenced by the certificates therefore, as
provided in Section 2 hereof and (b) the THAWTE Shareholder shall be paid
US$59,500 cash as provided in Section 2.

                      7.2.2 At the Closing, the Escrow Shares shall be delivered
to the Escrow Agent by VeriSign or VeriSign's transfer agent as provided in
Section 2.3 hereof.

                      7.2.3 The THAWTE Shareholder understands and agrees that
stop transfer instructions will be given to VeriSign's transfer agent with
respect to certificates evidencing the Exchange Shares to assure compliance with
the provisions of the THAWTE Affiliates Agreements and Investment Representation
Letter and that there will be placed on the certificates evidencing such
Exchange Shares legends as specified in the Investment Representation Letter.

                      7.2.4 After the Closing there will be no further
registration of transfers on the share register of THAWTE or its transfer agent
or company secretary of the THAWTE Stock that was issued and outstanding
immediately prior to the Closing. If, after the Closing, THAWTE Certificates are
presented for any reason, they will be canceled.

          8.      CONDITIONS TO OBLIGATIONS OF THAWTE AND THE THAWTE
                  SHAREHOLDER

                   The obligations of the THAWTE Shareholder to consummate the
Exchange are subject to the fulfillment or satisfaction, on and as of the
Closing, of each of the following conditions (any one or more of which may be
waived by THAWTE and the THAWTE Shareholder in their sole discretion, but only
in a writing signed by THAWTE and the THAWTE Shareholder):

                   8.1 Accuracy of Representations and Warranties. The
                       ------------------------------------------
representations and warranties of VeriSign set forth in Section 4 shall be true
and accurate in every material respect
<PAGE>

on and as of the Closing with the same force and effect as if they had been made
at the Closing, and THAWTE shall have received a certificate to such effect
executed by VeriSign's President or Chief Financial Officer.

                  8.2 Covenants. VeriSign shall have performed and complied in
                      ----------
all material respects with all of its covenants contained in Section 6 on or
before the Closing, and the THAWTE Shareholder shall have received a certificate
to such effect signed by VeriSign's President or Chief Financial Officer.

                  8.3 Compliance with Law; No Legal Restraints. There shall not
                      ----------------------------------------
be outstanding or threatened, or enacted or adopted, any order, decree,
temporary, preliminary or permanent injunction, legislative enactment, statute,
regulation, action, proceeding or any judgment or ruling by any court,
arbitrator, governmental agency, authority or entity, or any other fact or
circumstance (other than any such matter initiated by THAWTE, its officers or
directors or the THAWTE Shareholder), that, directly or indirectly, challenges,
threatens, prohibits, enjoins, restrains, suspends, delays, conditions or
renders illegal or imposes limitations on (or is likely to result in a
challenge, threat to, or a prohibition, injunction, restraint, suspension, delay
or illegality of, or to impose limitations on): (i) the Exchange or any other
transaction contemplated by this Agreement; (ii) VeriSign's payment for, or
acquisition or purchase of, some or all of the shares of THAWTE Stock or any
material part of the assets of THAWTE.

                  8.4 Government Consents. There shall have been obtained at or
                      ---------------------
prior to the Closing Date such permits and/or authorizations, and there shall
have been taken such other action by any regulatory authority having
jurisdiction over the parties and the actions herein proposed to be taken, as
may be required to lawfully consummate the Exchange, including but not limited
to requirements under applicable U.S. and foreign securities and corporations
laws and the South African Exchange Control Approval.

                  8.5 Opinion of VeriSign's Counsel. The THAWTE Shareholder
                      -----------------------------
shall have received from counsel to VeriSign, an opinion substantially in the
form of Exhibit 8.5.
        -----------

                  8.6 Documents. VeriSign shall have executed and delivered to
                      ---------
the THAWTE Shareholder the VeriSign Ancillary Agreements. VeriSign shall have
delivered a certificate representing the Exchange Shares (less any Escrow
Shares) to the THAWTE Shareholder and shall have delivered the Escrow Shares to
the Escrow Agent. THAWTE shall have received all written consents, assignments,
waivers, authorizations or other certificates reasonably deemed necessary by
THAWTE's legal counsel for THAWTE to lawfully consummate the transactions
contemplated hereby.

                  8.7 No Litigation. No litigation or proceeding (other than any
                      -------------
litigation or proceeding initiated by THAWTE, its Board of Directors,
Shareholder or officers or the THAWTE Shareholder) shall be threatened or
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of the Exchange or any of the other transactions contemplated
by this Agreement, or which could be reasonably expected to have a material
adverse effect on the present or future operations or financial condition of
VeriSign.
<PAGE>

                  8.8 Instructions to Transfer Agent; Deliveries. VeriSign shall
                      ------------------------------------------
have issued irrevocable instructions to its transfer agent to authorize the
issuance of VeriSign Common Stock in the Exchange consistent with Section 2
hereof. VeriSign shall have made the other deliveries contemplated by Section 2
hereof.

                  8.9 Satisfactory Form of Legal Matters. The form, scope and
                      ----------------------------------
substance of all legal and accounting matters contemplated hereby and all
closing documents and other papers delivered hereunder shall be reasonably
acceptable to the THAWTE Shareholder's counsel.

                  8.10 Nasdaq National Market Listing. The shares of VeriSign
                       ------------------------------
Common Stock issuable to the THAWTE Shareholder in the Exchange shall have been
authorized for listing on the Nasdaq National Market.

                  8.11 Delivery of VeriSign Undertaking. VeriSign shall have
                       --------------------------------
delivered, to THAWTE and to Entrust the Undertaking.

              9.  CONDITIONS TO OBLIGATIONS OF VERISIGN

                  The obligations of VeriSign hereunder are subject to the
fulfillment or satisfaction, on and as of the Closing, of each of the following
conditions (any one or more of which may be waived by VeriSign in its sole
discretion, but only in a writing signed by VeriSign):

                  9.1 Accuracy of Representations and Warranties. The
                      ------------------------------------------
representations and warranties of the THAWTE Shareholder set forth in Section 3
and in the Investment Representation Letters shall each be true and accurate in
every material respect on and as of the Closing with the same force and effect
as if they had been made at the Closing, except, in each case, where the failure
to be true and correct would not reasonably be expected to have a Material
Adverse Effect, and VeriSign shall have received certificates to such effect
executed by the THAWTE Shareholder.

                  9.2 Covenants. The THAWTE Shareholder shall have performed and
                      ---------
complied in all material respects with all of its respective covenants contained
in Section 5 on or before the Closing except, in each case, where the failure to
so perform or comply would not reasonably be expected to have a Material Adverse
Effect, and VeriSign shall have received certificates to such effect signed by
the THAWTE Shareholder.

                  9.3 Compliance with Law; No Legal Restraints. There shall not
                      ----------------------------------------
be outstanding, or enacted or adopted, any order, decree, temporary, preliminary
or permanent injunction, legislative enactment, statute, regulation, action,
proceeding or any judgment or ruling by any court, arbitrator, governmental
agency, authority or entity (other than any such matter initiated by VeriSign or
its officers or directors), that, directly or indirectly, challenges, threatens,
prohibits, enjoins, restrains, suspends, delays, conditions, or renders illegal
or imposes limitations on (or is likely to result in a challenge, threat to, or
a prohibition, injunction, restraint, suspension, delay or illegality of, or to
impose limitations on): (i) the Exchange or any other transaction contemplated
by this Agreement; (ii) VeriSign's payment for, or acquisition or
<PAGE>

purchase of, some or all of the shares of THAWTE Stock or any material part of
the assets of THAWTE or any THAWTE Subsidiary; (iii) the ownership or operation
by VeriSign or THAWTE of all or any material portion of the business or assets
of THAWTE, including (but not limited to) THAWTE's Intellectual Property Rights;
or (iv) VeriSign's ability to exercise full rights of ownership with respect to
THAWTE, the THAWTE Subsidiaries, and their respective assets and shares,
including but not limited to restrictions on VeriSign's ability to vote all the
shares of THAWTE or (indirectly through ownership of THAWTE) any THAWTE
Subsidiary.

                  9.4 Government Consents. There shall have been obtained at or
                      -------------------
prior to the Closing Date such permits or authorizations from, and there shall
have been taken such other action, as may be required to lawfully consummate the
Exchange by, any governmental or regulatory authority having jurisdiction over
any of the parties, or any THAWTE Subsidiary and/or the actions herein proposed
to be taken, including but not limited to requirements under applicable U.S. and
foreign securities and corporate laws.

                  9.5 Opinion of THAWTE's Counsel. VeriSign shall have received
                      ---------------------------
from counsel to the THAWTE Shareholder, opinions in substantially the form of
Exhibit 9.5.
- -----------

                  9.6 Documents and Consents. THAWTE and the THAWTE Shareholder
                      ----------------------
shall have executed and delivered to VeriSign all the THAWTE Ancillary
Agreements and all the Shareholder Ancillary Agreements, as applicable. The
THAWTE Shareholder shall have delivered to VeriSign THAWTE Certificates
representing 100% of the issued and outstanding shares of THAWTE together with
the other deliverables specified in Section 2.1.1 hereof. VeriSign shall have
received duly executed copies of all third-party consents, approvals,
assignments, waivers, authorizations or other certificates contemplated by this
Agreement or reasonably deemed necessary by VeriSign's legal counsel to provide
for the continuation in full force and effect of any and all material contracts,
agreements and leases of THAWTE and the preservation of THAWTE's IP Rights and
other assets and properties and for VeriSign to consummate the transactions
contemplated hereby, in form and substance reasonably satisfactory to VeriSign,
except for such thereof as the failure to so obtain would not have a Material
Adverse Effect, or that VeriSign and THAWTE shall have agreed in writing need
not be obtained.

                  9.7 No Litigation. No litigation or proceeding (other than any
                      -------------
litigation or proceeding initiated by VeriSign, its Board of Directors, its
shareholders, or its officers) shall be pending which could be reasonably
expected to have a Material Adverse Effect on the present or future operations
or financial condition of THAWTE.

                  9.8 Non-Competition Agreement. VeriSign shall have received
                      -------------------------
from the THAWTE Shareholder, a fully executed copy of a Non-Competition
Agreement in the form of Exhibit 9.9A.
                         -------------

                  9.9 Consulting Agreement. VeriSign shall have received from
                      --------------------
Mark Shuttleworth, a fully executed copy of a Consulting Agreement in the form
of Exhibit 9.10.
   -------------
<PAGE>

                  9.10  Escrow Agreement. VeriSign shall have received a fully
                        ----------------
executed copy of the Escrow Agreement in the form of Exhibit 2.4 executed by the
Escrow Agent, the Representative and the THAWTE Shareholder.

                  9.11  Appointment of New Directors and Officers. The directors
                         ----------------------------------------
and officers of THAWTE and each of the THAWTE Subsidiaries in office immediately
prior to the Closing of the Exchange shall have resigned effective as of the
Closing, unless otherwise directed by VeriSign, and designees of VeriSign shall
have been named as the sole directors and officers of THAWTE and each of the
THAWTE Subsidiaries prior to Closing, subject to any requirements of applicable
local law.

                  9.12  No Material Adverse Change. There shall not have been
                        --------------------------
any material adverse change in the financial condition, properties, assets,
liabilities, business, results of operations or operations of THAWTE and the
THAWTE Subsidiaries, taken as a whole, that would constitute a Material Adverse
Effect.

                  9.13  Surrender of Names. The corporate name "THAWTE" and the
                        ------------------
trade names and trademarks "THAWTE" shall have been assigned, released and
surrendered to THAWTE by Each of the entities listed on Exhibit 9.16 hereto and
                                                        ------------
each of such entities shall have commenced all necessary proceedings to obtain
regulatory approval to change its name to a name that does not include "THAWTE."

                  9.14  Delivery of Interim Financials. THAWTE shall have
                        ------------------------------
delivered the Interim Financials to VeriSign.

                  9.15  Satisfactory Form of Legal and Accounting Matters. The
                        -------------------------------------------------
form, scope and substance of all legal and accounting matters contemplated
hereby and all closing documents and other papers delivered hereunder shall be
reasonably acceptable to VeriSign's counsel and independent public accountants.

                  9.16  Real Property Purchase Agreement. THAWTE and the THAWTE
                        --------------------------------
Shareholder shall have executed the real property sale agreement identified in
Section 5.18 which shall transfer the Real Property as soon as is practicable
after the Closing Date.

         10.      TERMINATION OF AGREEMENT

                  10.1     Prior to or at the Closing.
                           --------------------------

                           10.1.1   This Agreement may be terminated at any time
prior to or at the Closing by the mutual written consent of VeriSign and the
THAWTE Shareholder.

                  10.1.2  This Agreement may be terminated after the Termination
Date by VeriSign if the conditions precedent set forth in Section 9 shall have
not been complied with, waived or performed and such noncompliance or
nonperformance shall not have been cured or eliminated (or by its nature cannot
be cured or eliminated) by THAWTE and/or the THAWTE Shareholder on or before
Midnight, Pacific Time on February 1, 2000(the "Termination Date").
<PAGE>

               10.1.3   This Agreement may be terminated after the Termination
Date by the THAWTE Shareholder if the conditions precedent set forth in Section
8 shall have not been complied with, waived or performed and such noncompliance
or nonperformance shall not have been cured or eliminated (or by its nature
cannot be cured or eliminated) by VeriSign on or before the Termination Date.

               10.1.4   VeriSign may terminate this Agreement at any time prior
to or at the Closing if any of the representations and warranties of the THAWTE
Shareholder in Section 3 of this Agreement were incorrect, untrue or false in
any material respect as of the Agreement Date or are incorrect, untrue or false
in any material respect as of the proposed Closing Date or the THAWTE
Shareholder has breached any of his respective covenants under Section 5 of this
Agreement, but in any case, only to the extent that such incorrectness, untruth,
falsity or breach shall cause the condition contained in Section 9.1 and/or 9.2
hereof to have failed, and the THAWTE Shareholder has not cured such breach
prior to the earlier of (i) the Closing, (ii) thirty (3 0) days after VeriSign
has given the THAWTE Shareholder written notice of its intention to terminate
this Agreement pursuant to this subsection or (iii) the Termination Date.

               10.1.5   The THAWTE Shareholder may terminate this Agreement at
any time prior to or at the Closing if any of the representations and warranties
of VeriSign in Section 4 of this Agreement were incorrect, untrue or false in
any material respect as of the Agreement Date or are incorrect, untrue or false
in any material respect as of the proposed Closing Date or VeriSign has breached
any of its covenants under Section 6 of this Agreement, and VeriSign has not
cured such breach prior to the earlier of (i) the Closing, (ii) thirty (30) days
after the THAWTE Shareholder has given VeriSign written notice of his intention
to terminate this Agreement pursuant to this subsection or (iii) the Termination
Date. Notwithstanding the foregoing, the THAWTE Shareholder may terminate this
Agreement at any time prior to or at the Closing if VeriSign shall have breached
its covenant contained in Section 6.8 hereof.

               Any termination of this Agreement under this Section 10 will be
effective by the delivery of notice of the terminating party to the other
parties hereto.

          10.2 No Liability for Proper Termination. Any termination of
               ------------------------------------
this Agreement in accordance with this Section 10 will be without further
obligation or liability upon any party in favor of the other party hereto or to
its stockholders, directors or officers, other than the obligations provided in
the Confidentiality Agreement; provided, however, that nothing herein will limit
                               --------  -------
the obligation of the THAWTE Shareholder and VeriSign for any willful breach
hereof or failure to use their best efforts to cause the Exchange to be
consummated, as set forth in Sections 5.9 and 6.3 hereof, respectively. In the
event of the termination of this Agreement pursuant to this Section 10, this
Agreement shall thereafter become void and have no effect and each party shall
be responsible for its own expenses incurred in connection herewith.

     11.  SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
          COVENANTS

          11.1 Survival of Representations. All representations, warranties and
               ---------------------------
covenants of the THAWTE Shareholder contained in this Agreement will remain
operative and in full force
<PAGE>

and effect, regardless of any investigation made by or on behalf of VeriSign,
until that date ("Escrow Release Date") which is the earlier of (i) the
termination of this Agreement or (ii) twelve (12) months after the Closing
Date.

               11.2 Agreement to Indemnify. The THAWTE Shareholder agrees to
                    ----------------------
indemnify and hold harmless VeriSign and its officers, directors, agents,
Shareholder and employees, and each person, if any, who controls or may control
VeriSign within the meaning of the 1933 Act or the 1934 Act (each hereinafter
referred to individually as an "Indemnified Person" and collectively as
"Indemnified Persons") from and against any and all claims, demands, suits,
actions, causes of actions, losses, costs, damages, liabilities and expenses
including, without limitation, reasonable attorneys' fees, other professionals'
and experts' reasonable fees and court or arbitration costs (hereinafter
collectively referred to as "Damages") incurred and arising out of any
inaccuracy, misrepresentation, breach of, or default in, any of the
representations, warranties or covenants given or made by THAWTE and/or the
THAWTE Shareholder in this Agreement or in any certificate delivered by or on
behalf of THAWTE pursuant hereto (if such inaccuracy, misrepresentation, breach
or default existed at the Closing Date). Any claim of indemnity made by an
Indemnified Person under this Section 11.2 must be asserted in a writing
delivered to the Escrow Agent by no later than the Escrow Release Date.

               11.3 Limitation. Notwithstanding anything herein to the contrary,
                    ----------
in seeking indemnification for Damages under Section 11.2, the Indemnified
Persons shall exercise their remedies only with respect to the Escrow Shares and
any other assets deposited in escrow pursuant to the Escrow Agreement. Except
for fraudulent conduct and willful misconduct and except for breaches of the
representations and warranties contained in Section 3.2.1 and except as provided
in Section 11.5: (i) THAWTE Shareholder shall not have any liability to an
Indemnified Person under this Agreement except to the extent of the Escrow
Shares and any other assets deposited under the Escrow Agreement and (ii) the
remedies set forth in this Section 11.3 and the Escrow Agreement shall be the
exclusive remedies of VeriSign and the other Indemnified Persons under this
Agreement or in any cause of action based thereon (subject to the exceptions in
the last sentence of this Section 11.3) against the THAWTE Shareholder for any
inaccuracy, misrepresentation, breach of, or default in, any of the
representations, warranties or covenants given or made by THAWTE or the THAWTE
Shareholder in this Agreement or in any certificate, document or instrument
delivered by or on behalf of THAWTE or the THAWTE Shareholder pursuant hereto or
in any cause of action based thereon (subject to the exceptions in the last
sentence of this Section 11.3). In addition, the indemnification provided for in
Section 11.2 shall not apply unless and until the aggregate Damages for which
one or more Indemnified Persons seeks or has sought indemnification hereunder
exceeds a cumulative aggregate of Two Hundred Fifty Thousand Dollars
($250,000.00) (the "Basket"), in which event the THAWTE Shareholder shall,
subject to the foregoing limitations, be liable to indemnify the Indemnified
Persons for all Damages in excess of the Basket. The limitations set forth in
this Section 11.3 shall not be applicable to Misconduct Damages (as defined
                        ---
below). As used herein, "Misconduct Damages" means Damages resulting from
fraudulent conduct or willful misconduct or breach of any provisions of the
Investment Representation Letter.
<PAGE>

               11.4 Notice. Promptly after VeriSign becomes aware of the
                    ------
existence of any potential claim by an Indemnified Person for indemnity from the
THAWTE Shareholder under Section 11.2, VeriSign will notify the THAWTE
Shareholder of such potential claim in accordance with the Escrow Agreement. The
THAWTE Shareholder shall be entitled to participate in and, to the extent the
THAWTE Shareholder elects by written notice to VeriSign within 30 days after
receipt by the THAWTE Shareholder of notice of such claim, to assume the defense
of such claim at its own expense, with counsel chosen by the THAWTE Shareholder.
Notwithstanding that the THAWTE Shareholder shall have elected by such written
notice to assume the defense of any claim, any Indemnified Party shall have the
right to participate in the investigation and defense thereof with separate
counsel chosen by such Indemnified Party, but in such event the fees and
expenses of such counsel shall be paid by such Indemnified Party .Failure of
VeriSign to give such notice shall not affect any rights or remedies of an
Indemnified Party hereunder with respect to indemnification for Damages except
to the extent the THAWTE Shareholder is materially prejudiced thereby. Prior to
the settlement of any claim for which VeriSign seeks indemnity from the THAWTE
Shareholder, VeriSign will provide the THAWTE Shareholder with the terms of the
proposed settlement and a reasonable opportunity to comment on such terms in
accordance with the Escrow Agreement. Nothing in this Section is intended to
preclude the Representative of the THAWTE Shareholder from contesting a claim
for indemnification hereunder in accordance with the terms and conditions of the
Escrow Agreement.

               11.5 Title Indemnity. In addition to, and separate from, the
                    ---------------
foregoing agreement to indemnify set forth in Section 11.2, the THAWTE
Shareholder agrees, to defend and indemnify VeriSign and each other Indemnified
Person from and against any and all claims, demands, suits, actions, causes of
actions, losses, costs, damages, liabilities and expenses including, without
limitation, reasonable attorneys' fees, other professionals' and experts'
reasonable fees and court or arbitration costs incurred and arising out of any
failure of such THAWTE Shareholder to have good, valid and marketable title to
any issued and outstanding shares of THAWTE Stock held (or asserted to have been
held) by such THAWTE Shareholder, free and clear of all liens, claims and
encumbrances, or to have the full right, capacity and authority to enter into
this Agreement and consummate the Exchange and any other transactions
contemplated by this Agreement, or any failure of THAWTE to have good, valid and
marketable title to all of the issued and outstanding shares of each of the
THAWTE Subsidiaries and any failure of the THAWTE Shareholder to own, of record
and beneficially, 100% of the issued and outstanding shares of THAWTE. A THAWTE
shareholder's liability under the indemnification provided for in this Section
11.5 shall be in addition to any liability of such THAWTE shareholder under
Section 11.2 and shall not be subject to the limitations on the THAWTE
Shareholder's liability set forth in Section 11.3 and shall not be limited to
such THAWTE Shareholder's Escrow Shares.

          12.  MISCELLANEOUS

               12.1 Governing Law/Jurisdiction. This Agreement, the VeriSign
                    --------------------------
Ancillary Agreements (collectively the "Transaction Agreements"), the THAWTE
Ancillary Agreements and the Shareholder Ancillary Agreements shall be governed
and construed in accordance with
<PAGE>

the laws of the State of California without regard to conflicts of laws
principles thereof and all questions concerning the validity and construction
hereof shall be determined in accordance with the laws of the State of
California Except as otherwise set forth herein, any reference to "laws" in this
Agreement shall mean the national and provincial laws of the Republic of South
Africa.

          12.2 Assignment; Binding Upon Successors and Assigns. No party
               -----------------------------------------------
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other parties hereto, except that VeriSign may assign its
respective rights to any wholly-owned subsidiary of VeriSign, provided that, in
the event of such assignment, VeriSign shall remain primarily liable for the
performance of its obligations hereunder. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

          12.3 Severability. If any provision of this Agreement, or the
               ------------
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.

          12.4 Counterparts. This Agreement may be executed in any number of
               ------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories.

          12.5 Other Remedies. Except as otherwise provided herein, any
               --------------
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by law
on such party, and the exercise of any one remedy will not preclude the exercise
of any other.

          12.6 Amendment and Waivers. Any term or provision of this Agreement
               ---------------------
may be amended prior to the Closing by the written consent of VeriSign, the
THAWTE Shareholder, and, after the Closing by VeriSign and the THAWTE
Shareholder (or their successors in interest). The observance of any term,
condition or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound thereby or for whose benefit such condition was
provided. The waiver by a party of any breach hereof or default in the
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. In addition, at any time prior to
the Closing, the THAWTE Shareholder and VeriSign (by action taken by its Board
of Directors) may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of the other; (ii) waive any
inaccuracies in the representations and warranties made to it contained herein
or in any document delivered pursuant hereto; and (iii) waive compliance with
any of the agreements or conditions for its benefit contained herein. No such
waiver or extension
<PAGE>

shall be effective unless signed in writing by the party against whom such
waiver or extension is asserted. The failure of any party to enforce any of the
provisions hereof will not be construed to be a waiver of the right of such
party thereafter to enforce such provisions or any other provisions.

          12.7 Expenses. Each party will bear its respective expenses
               --------
and legal fees incurred with respect to this Agreement, and the transactions
contemplated hereby.

          12.8 Attorneys' Fees. Should suit be brought to enforce or interpret
               ---------------
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit and not as damages, reasonable attorneys' fees
to be fixed by the court (including without limitation, costs, expenses and fees
on any appeal). The prevailing party will be entitled to recover its costs of
suit, regardless of whether such suit proceeds to final judgment.

          12.9 Notices. All notices and other communications required or
               -------
permitted under this Agreement will be in writing and will be either hand
delivered in person, sent by telecopier or sent by internationally recognized
express courier service. Such notices and other communications will be effective
upon receipt if hand delivered or sent by telecopier, and three (3) days after
dispatch if sent by express courier, to the following addresses, or to such
other addresses or fax number as any party may notify the other parties in
accordance with this Section:

               (i)  If to VeriSign:

                          VeriSign Inc.
                          1350 Charleston Road
                          Mountain View, CA 94043
                          Attention:  President

               with a copy to:

                          Fenwick & West LLP
                          Two Palo Alto Square, Suite 500
                          Palo Alto, CA 94306 Attention:  Gordon Davidson, Esq.
                          Fax Number:  (415) 494-1417

               (ii) If to THAWTE Shareholder:

                          Mark Shuttleworth
                          12 Plein Street
                          Durbanville Cape Town
                          7550
                          Fax Number:  (011) (27) (21) 975-3089
<PAGE>

                    with a copy to:

                          Werksmans Attorneys
                          Werksmans Chambers
                          22 Girton Road
                          Parktown, Johannesburg
                          2193
                          South Africa
                          Attention: Wildu du Plessis
              Fax:  (011)(27)(11) 484.3100

                    and a copy to:

                          Skadden, Arps, Slate, Meagher & Flom LLP
                          525 University Avenue
                          Suite 220
                          Palo Alto, California 94301
                                      USA
                          Attention:  Kenton J. King
                          Fax Number: (1)(650) 470.4570

          12.10 Construction of Agreement. This Agreement has been negotiated by
                -------------------------
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. A reference to a Section or an
exhibit will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.

          12.11 No Joint Venture. Nothing contained in this Agreement
                ----------------
will be deemed or construed as creating a joint venture or partnership between
any of the parties hereto. No party is by virtue of this Agreement authorized as
an agent, employee or legal representative of any other party. No party will
have the power to control the activities and operations of any other party and
their status is, and at all times will continue to be, that of independent
contractors with respect to each other. No party will have any power or
authority to bind or commit any other. No party will hold itself out as having
any authority or relationship in contravention of this Section.

          12.12 Further Assurances. Each party agrees to cooperate fully
                ------------------
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

          12.13 Absence of Third Party Beneficiary Rights. No provisions
                -----------------------------------------
of this Agreement are intended, nor will be interpreted, to provide or create
any third party beneficiary rights or any other rights of any kind in any
client, customer, affiliate, shareholder, partner,
<PAGE>

employee, agent, consultant or any party hereto or any other person or entity
unless specifically provided otherwise herein, and, except as so provided, all
provisions hereof will be personal solely between the parties to this Agreement.

          12.14 Public Announcement. Upon execution of this Agreement,
                -------------------
VeriSign and THAWTE will issue a press release approved by VeriSign and the
THAWTE Shareholder announcing the Exchange. Thereafter, VeriSign may issue such
press releases, and make such other disclosures regarding the Exchange, as it
determines are required under applicable securities laws or regulatory rules,
but shall first consult with the THAWTE Shareholder and provide the THAWTE
Shareholder with an opportunity to comment on any such press release. Prior to
the publication of the press release issued upon execution of this Agreement
(unless this Agreement has been terminated), no party hereto shall make any
public announcement relating to this Agreement or the transactions contemplated
hereby and the THAWTE Shareholder shall use his best efforts to prevent any
trading in VeriSign Common Stock by officers, directors, Shareholder, employees,
agents and consultants of THAWTE and/or of any THAWTE Subsidiaries.
Notwithstanding these limitations, in connection with the Closing, THAWTE's
financial advisor shall be permitted to publish tombstone advertisements related
to the transactions contemplated hereby.

          12.15 Confidentiality. The THAWTE Shareholder shall cause THAWTE to
                ---------------
confirm and VeriSign shall confirm that they have entered into the
Confidentiality Agreement and that they are each bound by, and will abide by,
the provisions of such Confidentiality Agreement [(except that VeriSign will
cease to be bound by the Confidentiality Agreement after the Exchange becomes
effective)]. If this Agreement is terminated, all copies of documents containing
confidential information of a disclosing party shall be returned by the
receiving party to the disclosing party or be destroyed, as provided in the
Confidentiality Agreement.

          12.16 Entire Agreement. This Agreement and the exhibits hereto
                ----------------
THAWTE constitute the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions, express
or implied, written or oral, between the parties with respect hereto other than
the Confidentiality Agreement. The express terms hereof control and supersede
any course of performance or usage of the trade inconsistent with any of the
terms hereof.

          12.17 U.S. Dollars; South African Rand. United States dollars are
                --------------------------------
referred to herein by the international symbol "$." South African Rand are
referred to herein by their international symbol "ZAR."
<PAGE>

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

VERISIGN, INC.



By: /s/ Stratton Sclavos
   -----------------------
Name:_____________________
Its:  President





THAWTE SHAREHOLDER


By: /s/ Mark Shuttleworth
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      Mark Shuttleworth



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