. Commitments and Contingencies:

(a) The Company has several non-cancelable lease and purchase obligations primarily for general office facilities, service contracts for mobile telephone services and equipment that expire over the next

ten

years. Future minimum payments under these agreements are as follows (Dollar amounts in thousands of US dollars):

Contractual Obligations for the year ending December 31,	Contractual Lease Obligations (1)		Purchase Obligations (2)		Total Obligations
2019		1,748		44,938		46,686
2020		1,084		5,068		6,152
2021		1,198		388		1,586
2022		1,182		379		1,561
2023		1,153		370		1,523
Thereafter		7,195		795		7,990
	$	13,560	$	51,938	$	65,498

(

)

Contractual lease obligations include an agreement to extend the lease of the Company's principal administrative office located in Toronto, ON. Prior to the extension, the lease agreement was set to expire on

December 31, 2020.

The new agreement extends the lease period from

2021

2030.

Not

including additional building operating expenses, the Company has committed to lease payments of

$7.4

million over the term of the lease extension.

(

)

Purchase obligations include all other legally binding service contracts for mobile telephone services and other operational agreements to be delivered during Fiscal

2019

and subsequent years. Note, Purchase Obligations do

not

include interest payments on the Company’s credit facilities.

Rental expense under operating lease agreements was

$2.3

million,

$1.9

million and

$1.2

million for the years ended

December

31,

2018,

2017

and

2016,

respectively.

(b) On

February 9, 2015

Ting Fiber, Inc.(“Ting”) entered into a lease and network operation agreement with the City of Westminster, Maryland (the “City”) relating to the deployment of a new fiber network throughout the Westminster area (“WFN”).

Under the agreement, the City will finance, construct, and maintain the WFN which will be leased to Ting for a period of

ten

years. The network will be constructed in phases, the scope and timing of which shall be determined by the City, in cooperation with Ting.

Under the terms of the agreement, Ting

may

be required to advance funds to the City in the event of a quarterly shortfall between the City’s revenue from leasing the network to Ting and the City’s debt service requirements relating to financing of the network. Ting could be responsible for shortfalls between

$50,000

and

$150,000

per quarter. In Fiscal

2016,

the City has entered into financing for the construction of the WFN which allows the City to draw up to

$21.0

million, from their lenders, over the next

five

years with interest only payments during that period with a loan maturity of

years. As of

December 31, 2018,

the City has drawn

$13.4

million and the City’s revenues from Ting exceed the City’s debt service requirements. The Company does

not

believe it will be responsible for any shortfall in Fiscal

2019.

September 17, 2018

Ting entered into a non-exclusive access and use agreement with a private infrastructure group. The agreement memorializes a long-term (

year) relationship wherein Ting will be granted the non-exclusive right to act as an Internet service provider for a fiber optic network to be constructed in a city in the United States. Under the terms of the agreement, the private infrastructure group is fully responsible for constructing, operating and maintaining a wholesale fiber optic network, as well as the financing of those activities.

Ting will be responsible for paying a fee per subscriber to the private infrastructure group. Through a “take or pay” arrangement, Ting has agreed to certain minimum charges based on minimum subscriber rates. These minimum fees are variable based on the percentage completion of the fiber optic network, and thus have

not

been considered an unconditional purchase obligation for the purposes of the table in Note

(a).

(d) In the normal course of its operations, the Company becomes involved in various legal claims and lawsuits. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of

December

31,

2018

cannot be predicted with certainty, management does

not

believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company’s financial position.

(e) On

August 30, 2017,

Namecheap, Inc. (“Namecheap”) filed a compliant against the Company, eNom, Inc., and unknown John Does in the United States District Court for the Western District of Washington alleging breach of contract, breach of the implied duty of good faith and fair dealing, and unjust enrichment (the “Namecheap Federal Action”). On

September 6, 2018,

Tucows and Namecheap entered into a settlement agreement, pursuant to which the matter was amicably resolved, and the case dismissed. Namecheap has provided Tucows an administrative fee for services in connection with transferring its domain names off Tucows’ platform.