Note 6 - Loan Payable

9 Months Ended

Sep. 30, 2011

6. LOAN PAYABLE:

The Company has credit agreements (collectively the “Amended Credit Facility”) with the Bank of Montreal (“bank”) that were amended on July 27, 2011, which provides the Company with access to the following facilities:

Existing Demand Loan 1

Under the Amended Credit Facility, the Company will continue to repay the $0.4 million balance outstanding as of July 27, 2011 under Existing Demand Loan 1 in equal monthly installments of $0.2 million plus interest. The Company may elect to pay interest on Existing Demand Loan 1 either at the BMO U.S. Base Rate plus 1.30% or at LIBOR plus 3.25%. The Company expects the Existing Demand Facility 1 to be fully repaid during October 2011.

Treasury Risk Management Facility

The Amended Credit Facility continues to provide for a $3.5 million, settlement risk line to assist the Company with hedging U.S. dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Amended Credit Facility, the Company may enter into such agreements at market rates with terms not to exceed 18 months. As of September 30, 2011, the Company has contracts in the amount of $31.9 million to trade U.S. dollars in exchange for Canadian dollars, (see Note 3).

Existing Operating Demand Loan

The Amended Credit Facility continues to provide a $1.0 million operating demand loan to the Company to assist it in meeting its operational needs. As of September 30, 2011, the Company has no borrowing under this facility. Interest is payable monthly in arrears at a rate of BMO U.S. Base Rate plus 1.25%. The Company has also agreed to pay to the Bank a monthly monitoring fee of $500.

Amended Credit Facilities

Under the terms of the Amended Credit Facility, Existing Demand Loan 2 has been restructured to provide an aggregate of $8.0 million in funds available through a demand loan revolving facility (the “2011 DLR Loan”) and a demand loan revolving, reducing facility (the “2011 DLRR Loan”). Aggregate advances under the 2011 Demand Loan Facilities may not exceed $8.0 million which may be used to finance the repurchases of the Company’s common stock and for certain permitted acquisitions. No more than $2.0 million of such advances may be used to finance repurchases of the Company’s common stock and the 2011 DLR Loan accrues interest at the BMO U.S. Base Rate plus 1.25%. Repayment of advances under the 2011 DLR Loan consists of interest only payments made monthly in arrears and prepayment is permitted without penalty.

On July 28, 2011, the Company drew down $2.5 million on the 2011 DLR Loan to fund the acquisition of EPAG Domainservices GmbH as more fully described under Note 3, Acquisitions. On August 11, 2011 the Company prepaid $1.0 million of this loan. Any outstanding balance under the 2011 DLR Loan as of December 31st of each year is to be fully repaid within 31 days of December 31st through an equivalent advance being made under the 2011 DLRR Loan. Advances under the 2011 DLRR Loan are repayable in 48 equal monthly principal payments plus interest. Advances under the 2011 DLRR Loan will be made annually and solely for such purpose. The Company may elect to pay interest on the 2011 DLRR Loan either at the BMO U.S. Base Rate plus 1.25% or LIBOR plus 2.50%. The 2011 Demand Loan Facilities are subject to an undrawn aggregate standby fee of 0.20% following the first draw, which fee is payable quarterly in arrears.

Amended Credit Facility – General Terms and Conditions

Under the Amended Credit Facility, the Company will continue to make annual cash sweep payments to the Bank; based on its audited financial statements provided, however, that such payments will be applied solely to amounts outstanding under the 2011 DLRR Loan in inverse order of maturity, and will no longer be applied to outstanding balances under Existing Demand Loan 1 or the 2011 DLR Loan.

Under the terms of the agreement, the Company has agreed to comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants at all times: (i) Maximum Senior Funded Debt to EBITDA of 2.00:1; (ii) Maximum Total Funded Debt to EBITDA of 2.50:1; and (iii) Minimum Fixed Charge Coverage of 1.25:1. Further, the Company’s Maximum Annual Capital Expenditures cannot exceed $3.6 million per year, which such limit will be reviewed on an annual basis. As of, and for the period ended, September 30, 2011, the Company was in compliance with these covenants.

Principal loan repayments over the next five years are as follows:

2011

1,559,722