Exhibit 10.1
STOCK REDEMPTION
AGREEMENT
THIS STOCK REDEMPTION AGREEMENT
(“Agreement”) is made and entered into as of the
4 th 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 2 nd
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
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