Loan payable:

2017

Amended Credit Facility

January 20, 2017,

the Company entered into an amended and restated secured Credit Agreement (the

“2017

Amended Credit Agreement”) with Bank of Montreal (“BMO” or the “Administrative Agent”), Royal Bank of Canada and Bank of Nova Scotia (collectively with “Lenders”) under which the Company increased its access to funds to an aggregate of

$140

million. This amendment and restatement to the Company’s

2016

Credit Facility (defined below), among other things, reduced the existing Tucows non-revolving facility (such existing non-revolving facility, together with other existing facilities, the “Existing Facilities”) from

$40.0

million to

$35.5

million, and established a new non-revolving credit facility of

$84.5

million (the “Facility D”). The Company immediately drew down

$84.5

million under Facility D to fund the acquisition of eNom (note

(b)). The

“2016

Credit Facility” refers to the credit facility established under the Company’s secured credit agreement (the

“2016

Credit Agreement”) among the Company, BMO and the Lenders, dated as of

August 18, 2016.

In connection with the

2017

Amended Credit Agreement, the Company incurred

$0.6

million of fees paid to lenders and debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the credit facility agreement.

The obligations of the Company under the

2017

Amended Credit Facility are secured by a

first

priority lien on substantially all of the personal property and assets of the Company.

The

2017

Amended Credit Facility has a

four

-year term. Under the

2017

Amended Credit Facility, the Company has access to an aggregate of up to

$140

million in funds that are available as follows:

●

million revolving credit facility (“Facility A”);

●

$15

million revolving reducing term facility (“Facility B”);

●

$35.5

million non-revolving facility (“Facility C”); and

●

$84.5

million non-revolving facility (“Facility D”).

Borrowings under the

2017

Amended Credit Facility accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA as described below. The purpose of Facility A is for general working capital and general corporate requirements, while Facility B and Facility C support share repurchases, acquisitions and capital expenditures associated with the Company’s Fiber to the Home program (“FTTH”). Facility D was provided and used for the acquisition of eNom.

The repayment terms for Facility A require monthly interest payments with any final principal payment becoming due upon maturity of the

2017

Amended Credit Facility. Under the repayment terms for Facility B, at

December

31st

of each year, balances drawn during the year that remain outstanding will become payable on a quarterly basis commencing the

first

quarter of the following year, for the period of amortization based on the purpose of the draw. For Facilities C and D, each draw will become payable beginning the

first

full quarter post initial draw for the period of amortization based on the purpose of the draw. The amortization periods for Facilities B, C and D are based on the purposes of the draws as follows: draws for share repurchases are repaid over

four

years, draws for acquisitions over

five

years and draws for FTTH capital expenditures over

seven

years. The

2017

Amended Credit Facility also includes a mechanism that is triggered based on the Company’s Total Funded Debt to EBITDA calculation at the end of each fiscal year. If Total Funded Debt to EBITDA exceeds

2.25:1

December 31

of each year during the term, the Company is obligated to make a repayment of

50%

of Excess Cash Flow as defined under the agreement.

The

2017

Amended Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The

2017

Amended Credit Facility requires that the Company to comply with the following financial covenants at all times, which are to be calculated on a rolling

four

quarter basis: (i) maximum Total Funded Debt to EBITDA Ratio of

2.50:1

until

September 30, 2018

and

2.25:1

thereafter; and (ii) minimum Fixed Charge Coverage Ratio of

1.20:1.

Further, the Company’s maximum annual Capital Expenditures cannot exceed

$50.0

million per year, which limit will be reviewed on an annual basis. In addition, funded share repurchases are

not

to exceed

$20

million, or up to

$40

million so long as the total loans related to share repurchases do

not

exceed

1.5

times of trailing

twelve

months EBITDA. As at and for the periods ending

March 31, 2018,

and

March 31, 2017,

the Company was in compliance with these covenants.

January 24, 2018,

the Company entered into the Second Interim Amendment to First Amended and Restated Credit Agreement (the “Second Interim Amendment”) with BMO and the Lenders. The Second Interim Amendment provides that certain defined terms in Section

1.01

of the Credit Agreement are added and updated to reflect the inclusion of liabilities to Sprint Mobile similar to the previous inclusion of T-Mobile liabilities. The Second Interim Amendment also permits Tucows to retain bank accounts with Silicon Valley Bank with the aggregate amount held in such accounts

not

to exceed

$3.0

million.

Borrowings under the

2017

Amended Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to EBITDA ratio and the availment type as follows:

	If Total Funded Debt to EBITDA is:

Availment type or fee	Less than 1.00			Greater than or equal to 1.00 and less than 2.00			Greater than or equal to 2.00 and less than 2.25			Greater than or equal to 2.25
Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin)		2.00	%		2.25	%		2.75	%		3.25	%

Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin)		0.75	%		1.00	%		1.50	%		2.00	%

Standby fees		0.40	%		0.45	%		0.55	%		0.65	%

The following table summarizes the Company’s borrowings under the credit facilities:

	March 31, 2018			December 31, 2017

Facility C		5,582,775			5,930,338
Facility D		67,598,400			71,823,300
Less: unamortized debt discount and issuance costs		(764,202	)		(829,611	)
Total loan payable		72,416,973			76,924,027
Less: loan payable, current portion		18,289,853			18,289,853
Loan payable, long-term portion		54,127,120			58,634,174

The following table summarizes our scheduled principal repayments as of

March 31, 2018:


Remainder of 2018		13,717,390
2019		18,289,853
2020		18,103,004
2021		17,542,457
2022		4,867,757
Thereafter		660,714
	$	73,181,175

Other Credit Facilities

Prior to the Company entering into the

2016

Credit Facility, the Company had credit agreements (collectively the “Amended Credit Facility”) with BMO that were amended on

November 19, 2012,

and which provided it with access to

two

revolving demand loan facilities (the

“2012

Demand Loan Facilities”), a treasury risk management facility, an operating demand loan and a credit card facility. The Company continues to have access to the treasury risk management facility and credit card facility, with the remaining loan facilities having been extinguished.

The treasury risk management facility under the Amended Credit Facility provides for a

$3.5

million settlement risk line to assist the Company with hedging Canadian 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

months. As of

March 31, 2018,

the Company held contracts in the amount of

$12.8

million to trade U.S. dollars in exchange for Canadian dollars (note

Q4,

2017,

the Company entered into a corporate credit card program with the Bank of Nova Scotia and the Lenders. The program provides that BMO and the Bank of Nova Scotia

may

establish corporate credit card facilities with the Company in an amount of up to

million.