Exhibit 10.1


 


STOCK REDEMPTION AGREEMENT


 


THIS
STOCK REDEMPTION AGREEMENT (“Agreement”) is made and entered into as of the 4th day of November, 2008 by and between Afilias Limited, an Irish
company limited by shares (“Afilias”) and Tucows, Inc., a Delaware. USA
corporation (“Seller”).


 


W I T N E S S E T H:


 


WHEREAS, Seller is the registered and beneficial owner of 353,722 Class A
ordinary shares of US$0.25 each in the capital of Afilias (the “Shares”); and


 


WHEREAS, Seller desires to sell to Afilias, and Afilias desires to redeem and
acquire from Seller, the Shares pursuant to the terms and conditions set forth
herein.


 


WHEREAS, this Agreement is made pursuant to Part XI  of the Companies
Act 1990 and the articles of association of Afilias which enable it to purchase
its own shares and was the subject of a special resolution adapted by the
Afilias shareholders at an extraordinary general meeting (“EGM”) of Afilias
held on the 2nd day of November
2008.


 


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


 


1.             Purchase and Sale of Stock.


 


1.1           Shares. Seller hereby agrees to sell to Afilias, and Afilias hereby agrees to
redeem and purchase, the Shares, free from any encumbrance charge, lien,
equities or claims and together with all accrued benefits and rights, subject
to the following terms and conditions:


 


1.2           Redemption Price. The total redemption price for the Shares to
be paid by Afilias to Seller shall be US$7,502,443.62 (based upon a per share
price of US$21.21 per share), less US$37,512.21 (which represents one-half of
the stamp duty required to be paid under Irish law), for a final aggregate
redemption price of Seven Million Four Hundred Sixty-Four Thousand Nine Hundred
Thirty-One and 41/100 U.S. Dollars (US$7,464,931.41) (the “Redemption Price”).
Afilias shall be responsible for payment of all stamp duties required under
Irish law on account of the transfer of the Shares to Afilias hereunder. The
credit to the purchase price in the amount of US$37,512.21 represents the
agreement of the parties to bear the cost of the stamp duty in equal shares.


 


1.3           Purchase Schedule. The redemption of the Shares is scheduled to
be completed in three transactions:


 


1.3.1.       First Transaction.
Closing on the purchase of the first 153,722 shares (“First Block”) shall be
completed within 30 days following the date of this Agreement (the “First
Closing Date”);


 


1.3.2        Second Transaction. On
or before 30 June 2009 (the “Second Closing Date”), Afilias shall acquire
a second block of shares equal to 100,000 shares (the “Second Block”).
Provided, however, that Afilias’ obligation to purchase the Second Block is
contingent upon Afilias having distributable reserves (within the meaning of Part IV
of the Companies (Amendment) Act 1983) sufficient to complete the acquisition
of the Second Block as of the Second Closing Date. If Afilias shall be unable
to purchase the entire Second Block as of the Second Closing Date due to
distributable reserve


 

















 


restrictions,
the rights and obligations of the parties with respect to all unpurchased
Shares as of such date shall lapse and be of no further force or effect.


 


1.3.3        Third Transaction. On or before 31 December 2009 (the “Third
Closing Date”), Afilias shall acquire a third block of shares equal to 100,000
shares (the “Third Block”). Provided, however, that Afilias’ obligation to purchase
the Third Block is contingent upon Afilias having distributable reserves
(within the meaning of Part IV of the Companies (Amendment) Act 1983)
sufficient to complete the acquisition of the Third Block as of the Third
Closing Date. If Afilias shall be unable to purchase the entire Third Block as
of the Third Closing Date due to distributable reserve restrictions, the rights
and obligations of the parties with respect to all unpurchased Shares as of
such date shall lapse and be of no further force or effect.


 


1.4           Closing on Respective Transactions.


 


1.4.1        First Block Closing. Within ten (10) days following full
execution of this Agreement, Afilias shall cause to be prepared and delivered
to Seller all documents as Afilias or its corporate counsel shall reasonably
deem necessary to effect the redemption of the First Block by Afilias. No later
than five (5) days after receipt by the Seller from Afilias or Afilias’
counsel of such redemption documents, Seller shall execute such documents and
return them to Afilias’ corporate counsel; provided that such redemption
documents are acceptable to Seller acting reasonably. Closing on the sale of
the First Block hereunder (the “First Block Closing”) shall be held at a time
and place mutually agreed between Seller and Afilias, but not later than the
First Closing Date. At the First Block Closing, (i) Afilias shall arrange
for stamping of the executed stock transfer form with the Irish Revenue
Commissioners in respect of the Stamp Duty payable and carry out any further
actions necessary to effect the transfer of the First Block to Afilias and (ii) Afilias
shall deliver to Seller by wire transfer an amount equal to the pro-rata
portion of the Redemption Price allocable to the First Block (i.e.,
US$3,244,141.40). Seller and Afilias shall cooperate in all reasonable respects
with Afilias’ corporate counsel to have all required transfer and stamp duty
forms duly filed in Ireland.


 


1.4.2        Second Block Closing. Assuming that the distributable reserve
conditions (set forth in sections 1.3.2) have been met with respect to the
Second Block, closing on the Second Block shall proceed as follows: No later
than 30 days prior to the Second Closing Date, Afilias shall cause to be
prepared and delivered to Seller all documents as Afilias or its corporate
counsel shall reasonably deem necessary to effect the redemption of the Second
Block by Afilias. No later than five (5) days after receipt by the Seller
from Afilias or Afilias’ counsel of such redemption documents, Seller shall
execute such documents and return them to Afilias’ corporate counsel; provided
that such redemption documents are acceptable to Seller acting reasonably.
Closing on the sale of the Second Block hereunder (the “Second Block Closing”)
shall be held at a time and place mutually agreed between Seller and Afilias,
but not later than the Second Closing Date. At the Second Block Closing, (i) Afilias
shall arrange for stamping of the executed stock transfer form with the Irish
Revenue Commissioners in respect of the Stamp Duty payable and carry out any
further actions necessary to effect the transfer of the Second Block to Afilias
and (ii) Afilias shall deliver to Seller by wire transfer an amount equal
to the pro-rata portion of the Redemption Price allocable to the Second Block
(i.e., US$2,110,395.00). Seller and Afilias shall cooperate in all reasonable
respects with Afilias’ corporate counsel to have all required transfer and
stamp duty forms duly filed in Ireland.


 


1.4.3        Third Block Closing. Assuming that the distributable reserve
conditions (set forth in sections 1.3.3) have been met with respect to the
Third Block, closing on the Third Block shall proceed as follows: No later than
30 days prior to the Third Closing Date, Afilias shall cause to be prepared and
delivered to Seller all documents as Afilias or its corporate counsel shall
reasonably deem necessary to effect the redemption of the Third Block by
Afilias. No later than five (5) days after receipt by the Seller from Afilias
or Afilias’ counsel of such redemption documents, Seller shall execute such
documents and return them to Afilias’ corporate counsel; provided that such
redemption documents are


 


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acceptable
to Seller acting reasonably. Closing on the sale of the
Third Block hereunder (the “Third Block Closing”) shall be held at a time and
place mutually agreed between Seller and Afilias, but not later than the Third
Closing Date. At the Third Block Closing, (i) Afilias shall arrange for
stamping of the executed stock transfer form with the Irish Revenue
Commissioners in respect of the Stamp Duty payable and carry out any further
actions necessary to effect the transfer of the Third Block to Afilias and (ii) Afilias
shall deliver to Seller by wire transfer an amount equal to the pro-rata
portion of the Redemption Price allocable to the Third Block (i.e.,
US$2,110,395.00). Seller and Afilias shall cooperate in all reasonable respects
with Afilias’ corporate counsel to have all required transfer and stamp duty
forms duly filed in Ireland.


 


2.             Rights Prior to Transfer. Seller shall retain all rights with respect
to any given portion of the Shares, including, without limitation, all voting
rights and the right to receive dividends paid on account of such Shares, until
such date as they are transferred to Afilias. Once any portion of the Shares is
transferred to Afilias, all rights with respect to such portion of the Shares
shall transfer to Afilias.


 


3.             Representations and Warranties of Seller. Seller represents and warrants to Afilias as
follows:


 


3.1           Enforceability. Seller has full power and authority to
execute and deliver this Agreement and all documents provided for herein and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement and all documents provided for herein have been duly authorized
by all necessary corporate action on the part of Seller, and this Agreement has
been duly executed and delivered by a duly authorized officer of Seller. This
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms.


 


3.2           No Conflict. The execution, delivery and performance of this Agreement by Seller and
the consummation of the transactions contemplated hereunder will not violate the
organizational documents or bylaws of Seller, or any provision of law
applicable to Seller, and will not conflict with, or result in the breach or
termination of any provision of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any of the Shares by
reason of, any provision of any instrument or agreement to which Seller is a
party or by which Seller is bound.


 


3.3           Title. Seller is the sole registered and beneficial owner of all of the
Shares and has, and at the time of delivery of each block of the Shares by
Seller to Afilias hereunder, shall have, (i) good and marketable title to
such Shares, free and clear of any liens, encumbrances, charges, equities or
claims and (ii) full right, power and authority to effect the sale and
delivery of such Shares to Afilias hereunder; and upon the delivery of such
Shares to Afilias, Afilias will acquire good and marketable title thereto, free
and clear of any liens, encumbrances, charges, equities or claims.


 


4.             Representations and Warranties of Afilias. Afilias represents and warrants to Seller as
follows:


 


4.1           Enforceability. Afilias has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
The execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of Afilias, and this
Agreement has been duly executed and delivered by a duly authorized officer of
Afilias. This Agreement constitutes the legal, valid and binding obligation of
Afilias, enforceable in accordance with its terms.


 


4.2           No Conflict.  The execution, delivery and performance of this Agreement
by Seller and the consummation of the transactions contemplated hereunder will
not violate the organizational documents or bylaws of Afilias, or any provision
of law applicable to Afilias, and will not conflict with, or result in the
breach or termination of any provision of, or constitute a default under, any
provision of any instrument or agreement to which Afilias is a party or by
which Afilias is bound.


 


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4.3           Authority for Redemption. All requirements of Part XI of the
Companies Act 1990 relating to an ‘off-market purchase’ by a company of its own
shares have been complied with.


 


5.             Conditions to Closing.


 


5.1           Conditions to Obligations of Afilias. The obligations of Afilias to close
hereunder are subject to the fulfillment (or waiver, in writing) at or prior to
each Closing hereunder of the following conditions:


 


5.1.1        The representations and warranties of Seller herein contained shall have
been true in all material respects when made and, in addition, shall be true in
all material respects on and as of the First Closing Date, the Second Closing
Date and the Third Closing Date with the same force and effect as though made
on and as of such closing date; and


 


5.1.2        Each and all of the agreements and covenants of Seller to be performed
on or before the First Closing Date, the Second Closing Date and the Third Closing
Date pursuant to the terms hereof shall have been duly performed.


 


5.2           Conditions to Obligations of Seller. The obligations of Seller to close hereunder are
subject to the fulfillment (or waiver, in writing), at or prior to the First
Closing Date, the Second Closing Date and the Third Closing Date, of the
following conditions:


 


5.2.1        The representations and warranties of Afilias herein contained shall
have been true in all material respects when made and, in addition, shall be
true in all material respects on and as of First Closing Date, the Second
Closing Date and the Third Closing Date with the same force and effect as
though made on and as of such closing date; and


 


5.2.2        Each and all of the agreements and covenants of Afilias to be performed
on or before the pursuant to the terms hereof shall have been duly performed.


 


6.             Survival; Indemnification.


 


6.1           Survival. All of the representations, warranties and continuing obligations of
the parties contained in this Agreement shall survive the execution, the First
Closing Date, the Second Closing Date,
the Third Closing Date and
delivery of this Agreement


 


6.2           Indemnification by Seller. Seller shall indemnify and hold harmless
Afilias from and against any and all claims, damages, losses, liabilities, costs
and expenses (including reasonable legal fees and disbursements) caused by or
arising out of the breach by Seller of any of its representations, warranties,
covenants, obligations or agreements contained in this Agreement.


 


6.3           Indemnification by Afilias.  Afilias shall indemnify and hold harmless
Seller from and against any and all claims, damages, losses, liabilities, costs
and expenses (including reasonable legal fees and disbursements) caused by or
arising out of the breach by Afilias of any of its representations, warranties,
covenants, obligations or agreements contained in this Agreement.


 


7.             Miscellaneous.


 


7.1           Further Assurances.
The parties hereto agree to
execute and deliver or cause to be executed and delivered upon execution of
this Agreement, or at other reasonable times, such additional instruments as
Afilias, or its counsel, may reasonably request for the purpose of carrying out
the transactions contemplated by this Agreement.


 


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7.2           Notice. Any notice or other
communication required or permitted to be delivered to any party under this
Agreement will be in writing and will be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by courier or express
delivery service, or by e-mail) to the address set forth beneath the name of
such party below, unless party has given a notice of a change of address in writing:


 


if
to Seller: [Seller to Complete].


 


	
   

  	
  Tucows Inc

  	
   

  
	
   

  	
  96 Mowat Avenue

  	
   

  
	
   

  	
  Toronto ON Canada

  	
   

  
	
   

  	
  M6K 3M1

  	
   

  
	
   

  	
  Attn:
  Elliot Noss

  	
   

  
	
   

  	
  e-mail: enoss@tucows.com

  	
   

  



 


With
a copy to:


 


	
   

  	
  Tucows Inc

  	
   

  
	
   

  	
  96 Mowat Avenue

  	
   

  
	
   

  	
  Toronto ON Canada

  	
   

  
	
   

  	
  M6K 3M1

  	
   

  
	
   

  	
  Attn:
  Michael Cooperman

  	
   

  
	
   

  	
  e-mail: mcooperman@tucows.com

  	
   

  



 


if
to Afilias:


 


	
   

  	
  Afilias
  Limited

  	
   

  
	
   

  	
  Office
  110, 52 Broomhill Road 

  	
   

  
	
   

  	
  Tallaght

  	
   

  
	
   

  	
  Dublin
  24

  	
   

  
	
   

  	
  Ireland

  	
   

  
	
   

  	
  Attn:
  CEO

  	
   

  
	
   

  	
  e-mail:
  hlubsen@afilias.info

  	
   

  



 


With
copy to:


 


	
   

  	
  Afilias
  Limited

  	
   

  
	
   

  	
  c/o
  Afilias USA, Inc.

  	
   

  
	
   

  	
  300
  Welsh Road

  	
   

  
	
   

  	
  Building
  3, Suite 105

  	
   

  
	
   

  	
  Horsham,
  PA 19044

  	
   

  
	
   

  	
  Attn:
  Legal Department

  	
   

  
	
   

  	
  e-mail:
  legal@afilias.info

  	
   

  



 


7.3             Confidentiality.
The terms of this Agreement are confidential and no disclosure thereof shall be
made by any party hereto without the consent of the other party unless required
by law or otherwise required to effect the transaction contemplated hereby.


 


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7.4             Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement between the parties with respect to the
subject matter hereof, and all prior negotiations, whether oral or in writing,
are merged herein to the extent they relate to the subject matter hereof in any
way.


 


7.5             Amendment. No change, amendment or modification of this Agreement shall be binding
unless set forth in writing and signed by all of the parties hereto.


 


7.6             Binding Effect; Assignment. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Neither this Agreement nor any interest
in or benefit under this Agreement may be assigned by any party without the
prior written consent of the other party hereto.


 


7.7             Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of Ireland.


 


7.8             Severability.  Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.


 


7.9             Remedies. Seller acknowledges that Seller’s breach of its obligations to close hereunder
may result in irreparable and continuing harm to Afilias for which there may be
no adequate remedy at law. In the event of a breach of this Agreement by
Seller, Afilias shall have the right to seek injunctive relief to prevent or
restrain such breach of this Agreement and to compel the transfer of the
Shares, in addition to all other remedies available to Afilias at law or in
equity.


 


7.10           Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same instrument.


 


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


 


	
   

  	
  SELLER:
  TUCOWS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elliot Noss

  
	
   

  	
   

  	
   

  
	
   

  	
  Print
  Name:

  	
  Elliot Noss

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  
						



 


 


AFILIAS LIMITED:


 


	
  PRESENT
  when the common seal

  of AFILIAS LIMITED

  was affixed hereto:

  	
  /s/
  [illegible]

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  [illegible]

  
	
   

  	
  Print
  name

  
	
   

  	
   

  
	
   

  	
  /s/
  [illegible]

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  [illegible]

  
	
   

  	
  Print
  name

  



 


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