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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to
Commission file number 1-32600

TUCOWS INC.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania
23-2707366
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification No.)
96 Mowat Avenue,
Toronto, Ontario M6K 3M1, Canada
(Address of Principal Executive Offices) (Zip Code)
(416) 535-0123
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading
Symbol(s)		Name of each exchange on which registered
Common Stock
TCX
NASDAQ
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T §232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer oAccelerated filer x
Non-accelerated fileroSmaller reporting company o
Emerging Growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No x

As of November 3, 2026, there were 11,220,919 outstanding shares of common stock, no par value, of the registrant.
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TUCOWS INC.
Form 10-Q Quarterly Report
INDEX
TRADEMARKS, TRADE NAMES AND SERVICE MARKS
Tucows®, EPAG®, Hover®, OpenSRS®, Ting®, ENom®, Ascio®, Simply Bits® and Wavelo® are registered trademarks of Tucows Inc. or its subsidiaries. Other service marks, trademarks and trade names of Tucows Inc. or its subsidiaries may be used in this Quarterly Report on Form 10-Q (this “Quarterly Report”). All other service marks, trademarks and trade names referred to in this Quarterly Report are the property of their respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we or the owner of such trademark, as applicable, will not assert, to the fullest extent under applicable law, our or its rights, or the right of the applicable licensor, to these trademarks.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Tucows Inc.

Condensed Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)
(unaudited)

September 30,
2026		December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$24,752 $46,759 
Restricted cash
5,095 5,315 
Accounts receivable, net of expected credit losses of $925 as of September 30, 2026 and $1,259 as of December 31, 2025
28,466 24,494 
Deferred costs of fulfillment, current portion
97,208 97,151 
Prepaid expenses and other
23,158 29,375 
Total current assets
178,679 203,094 
Deferred costs of fulfillment, long-term portion
16,235 15,883 
Secured notes reserve funds
11,113 12,171 
Property and equipment, net
263,871 281,955 
Right of use lease asset
79,324 63,315 
Intangible assets
18,057 19,703 
Goodwill
130,410 130,410 
Other assets
4,624 4,378 
Total assets
$702,313 $730,909 
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities
$34,685 $35,272 
Derivative instrument liabilities
95 75 
Operating lease liability, current portion
6,726 5,771 
Contract liabilities, current portion
129,365 131,581 
Syndicated revolver, current portion
21,056 
- 
Redeemable preferred units - no par value, 33,333,333 units authorized; nil units issued and outstanding as of September 30, 2026; 15,243,600 units issued and outstanding as of December 31, 2025
- 136,963 
Deferred gain on restructured debt
146,117 
- 
Other current liabilities
21,473 20,765 
Total current liabilities
359,517 330,427 
Contract liabilities, long-term portion
21,528 21,354 
Operating lease liability, long-term portion
71,659 57,823 
Syndicated revolver, long-term portion
162,142 189,531 
Notes payable
294,642 291,646 
Other long-term liabilities
59 
1,366 
Deferred tax liability
2,961 2,962 
Stockholders' deficit
Common stock - no par value, 250,000,000 shares authorized; 11,196,980 and 11,111,453 shares issued and outstanding as of September 30, 2026 and December 31, 2025
39,619 
38,308 
Additional paid-in capital
25,086 23,526 
Accumulated deficit
(274,828)
(225,977)
Accumulated other comprehensive loss
(72)(57)
Total stockholders' deficit
(210,195)(164,200)
Total liabilities and stockholders' deficit
$702,313 $730,909 
See accompanying notes to condensed consolidated financial statements
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Table of Contents
Tucows Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollar amounts in thousands of U.S. dollars, except per share amounts)
(unaudited)

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Net revenues$99,975 $98,558 $297,188 $291,630 
Cost of revenues:
Direct cost of revenues54,201 57,830 169,357 172,060 
Network, other costs6,513 5,855 18,619 17,488 
Network, depreciation and amortization10,134 10,692 30,171 32,260 
Total cost of revenues70,848 74,377 218,147 221,808 
Gross profit29,127 24,181 79,041 69,822 
Expenses:
Sales and marketing11,701 11,882 36,358 34,818 
Technical operations and development4,816 4,682 14,108 13,433 
General and administrative11,538 9,650 34,462 28,552 
(Gain) loss on disposition of property and equipment(1)(3,965)827 (5,753)
Depreciation and amortization775 785 2,751 2,537 
Impairment of property and equipment- 10,724 - 10,724 
Total expenses28,829 33,758 88,506 84,311 
Income (loss) from operations298 (9,577)(9,465)(14,489)
Other income (expenses):
Interest expense, net(10,689)(13,901)(39,004)(41,135)
Other income, net2,106 2,915 7,128 8,722 
Total other expenses, net(8,583)(10,986)(31,876)(32,413)
Loss before provision for income taxes(8,285)(20,563)(41,341)(46,902)
Provision for income taxes1,988 2,456 7,510 6,887 
Net loss for the period(10,273)(23,019)(48,851)(53,789)
Other comprehensive income (loss), net of tax
Unrealized income (loss) on hedging activities69 (916)(241)(239)
Net amount reclassified to earnings(11)123 226 772 
Other comprehensive income (loss) net of tax expense (recovery) of $18 and $(253) for the three months ended September 30, 2026 and September 30, 2025, and $1 and $174 for the nine months ended September 30, 2026 and September 30, 2025.
58 (793)(15)533 
Comprehensive loss, for the period$(10,215)$(23,812)$(48,866)$(53,256)
Basic and diluted loss per common share$(0.92)$(2.08)$(4.38)$(4.87)
Shares used in computing basic and diluted loss per common share11,182,254 11,079,486 11,152,102 11,053,725 
See accompanying notes to the condensed consolidated financial statements
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Tucows Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
(unaudited)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Cash provided by:
Operating activities:
Net loss for the period$(10,273)$(23,019)$(48,851)$(53,789)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization10,909 11,477 32,922 34,797 
Amortization of debt discount and issuance costs1,121 1,173 3,433 3,514 
(Gain) loss on disposition of property and equipment(1)(3,965)827 (5,753)
Impairment of property and equipment- 10,885 614 11,524 
Deferred income taxes (recovery)(18)252 5 (170)
Accretion of redeemable preferred units1,670 9,351 12,088 9,351 
Stock-based compensation expense962 1,387 3,220 4,278 
Change in non-cash operating working capital
Accounts receivable(5,394)(3,757)(3,972)(7,103)
Prepaid expenses and deposits4,019 1,853 7,696 (370)
Deferred costs of fulfillment2,671 2,641 (409)655 
Accounts payable and accrued liabilities(2,512)(3,691)(858)(7,547)
Contract liabilities(4,457)(4,041)(2,041)1,860 
Other current liabilities480 - 480 - 
Other operating assets and liabilities(3,792)988 (4,309)5,602 
Net cash provided by (used in) operating activities(4,615)1,534 845 (3,151)
Financing activities:
Proceeds received on exercise of stock options- - - 31 
Payment towards repurchase of subsidiary shares(74)- (74)- 
Redemption of preferred units(3,000)- (3,000)- 
Repayment of syndicated revolver(6,000)(2,500)(6,000)(5,000)
Payment of syndicated revolver costs(681)(423)(681)(423)
Net cash provided by (used in) financing activities(9,755)(2,923)(9,755)(5,392)
Investing activities:
Proceeds on disposal of property and equipment448 7,387 2,384 19,023 
Acquisition of equity interest in partnership(240)- (240)- 
Additions to property and equipment(5,081)(3,851)(15,663)(12,756)
Acquisition of intangible assets- 7 (856)(206)
Net cash provided by (used in) investing activities(4,873)3,543 (14,375)6,061 
Increase (decrease) in cash and cash equivalents, restricted cash, and restricted cash equivalents(19,243)2,154 (23,285)(2,482)
Cash and cash equivalents, restricted cash, and restricted cash equivalents beginning of period60,203 68,602 64,245 73,238 
Cash and cash equivalents, restricted cash, and restricted cash equivalents end of period$40,960 $70,756 $40,960 $70,756 
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the interim consolidated balance sheets to the amounts shown in the interim condensed consolidated statements of cash flows above:
Cash and cash equivalents24,752 54,078 24,752 54,078 
Restricted cash included in funds held by trustee5,095 4,618 5,095 4,618 
Restricted cash included in secured notes reserve funds11,113 12,060 11,113 12,060 
Total cash and cash equivalents, restricted cash, and restricted cash equivalents end of period$40,960 $70,756 $40,960 $70,756 
Supplemental cash flow information:
Interest paid$8,057 $8,464 $24,391 $35,271 
Income taxes paid, net$2,334 $1,140 $9,621 $4,531 
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for$1,778 $1,865 $1,778 $1,865 
See accompanying notes to the condensed consolidated financial statements
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NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Organization of the Company
Tucows Inc. (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions) is a corporate parent, allocating capital and providing efficient shared services to its three businesses Ting, Wavelo and Tucows Domains Services. Ting provides retail consumers and small businesses with high-speed fixed Internet access in a number of towns and cities across the United States. Wavelo offers platform services which provide solutions to support Communication Service Providers ("CSPs") including subscription and billing management, network orchestration and provisioning, individual developer tools, and other professional services. Tucows Domains Services is a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users.
2. Basis of Presentation
The accompanying unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring adjustments, that are, in the opinion of management, necessary for a fair statement of the financial position of Tucows and its subsidiaries as of September 30, 2026 and the results of operations and cash flows for the interim periods ended September 30, 2026 and 2025. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods.
The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared by Tucows in conformity with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. Generally Accepted Accounting Principles (“GAAP”). Certain information and footnote disclosures normally included in the Company's annual audited consolidated financial statements and accompanying notes have been condensed or omitted. These interim Condensed Consolidated Financial Statements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in Tucows' 2025 Annual Report on Form 10-K filed with the SEC on March 12, 2026 (the “2025 Annual Report”). There have been no material changes to our significant accounting policies and estimates during the three and nine months ended September 30, 2026 as compared to the significant accounting policies and estimates described in our 2025 Annual Report.
Subsidiary financial condition
Beginning in the fourth quarter of 2025, the Company initiated and continues to conduct a review of strategic alternatives for the Company's subsidiary, Ting Fiber, LLC ("Ting"). In the first and second quarter 2026 financial statements, the Company disclosed that substantial doubt existed about Ting’s ability to meet its obligations within one year of the issuance date of those financial statements. During the third quarter of 2026, the Company took several actions to address the conditions giving rise to substantial doubt. On July 27, 2026, the Company entered into the Third Amendment (as defined in "Note 7. Long Term Debt" below) to its syndicated credit agreement, which among other amendments, amended a negative covenant that restricted the Company from investing funds in Ting, to permit the Company to make additional investments in Ting, including through intercompany debt. On July 27, 2026, the Company purchased all of the Series A Preferred Units of Ting held by Generate TF Holdings, LLC (“Generate”) for $3.0 million in cash and contingent consideration as described in "Note 19. Redeemable Preferred Units", and the units were cancelled and retired, which removed Ting’s preferred-unit redemption obligation, accrued preferred return and related Return Breach (as defined in "Note 19. Redeemable Preferred Units") exposure. In connection with the purchase of the Series A Preferred Units, the Company provided Ting with a $5.0 million intercompany term loan. In addition, Ting sold its Centennial, Colorado data center to the Company for $6.0 million cash consideration and has implemented other cost efficiency measures to reduce its cash requirements. As a result of these actions, management has concluded that the substantial doubt about Ting’s ability to meet its obligations within one year of the issuance date of these financial statements has been alleviated.

Ting’s third-party debt has no recourse to the Company. Accordingly, the Company’s direct financial exposure to Ting is limited to the intercompany loan, which eliminates on consolidation, and certain contractual guarantees as disclosed in "Note 19. Redeemable Preferred Units" and “Note 20. Commitments and Contingencies." The Company does not believe that Ting's financial condition gives rise to substantial doubt about the Company's ability to continue as a going concern.

3. Recent Accounting Pronouncements
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (ASU 2024-03), which requires that a public entity disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption presented on the face of the income statement. The standard also requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively as well as disclose the total amount of selling expenses and, annually, the entity’s definition of selling expenses. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, with either retrospective or prospective application. The standard allows for early adoption of these requirements and we are currently evaluating the disclosure impacts of our adoption.
In September 2025, the FASB issued ASU 2025‑06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The amendments update the accounting model for internal-use software by eliminating the prescriptive “development-stage” framework and replacing it with a “probable-to-complete” threshold and a “significant development uncertainty” evaluation. The amendments also remove separate guidance for website development costs and require entities to apply the property, plant, and equipment disclosure requirements in Subtopic 360-10 to capitalized internal-use software. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.
4. Derivative Instruments and Hedging Activities
Foreign Exchange Hedges
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivative instruments is foreign exchange rate risk.
Since October 2012, the Company has employed a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian
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dollars and are expected to be paid by its Canadian subsidiaries. The Company does not use forward contracts for trading or speculative purposes. The foreign exchange contracts typically mature between one and twelve months.
The Company has designated certain of these foreign exchange transactions as cash flow hedges for forecasted transactions. Where the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same, in accordance with ASC 815 Derivatives and Hedging ("ASC 815"), the Company concludes that changes in fair value and cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. The Company designated the foreign exchange hedge as a cash flow hedge of expected future payments at the inception of the contract. Accordingly, for the foreign exchange contracts, unrealized gains or losses on the effective portion of these contracts were included within other comprehensive income (loss) and reclassified to earnings when the hedged transaction is settled. Cash flows from hedging activities were classified under the same category as the cash flows from the hedged items in the Condensed Consolidated Statements of Cash Flows. The fair value of the foreign exchange contracts, as of September 30, 2026 and December 31, 2025, is recorded as derivative instrument assets or liabilities. For certain contracts where the hedged transactions are no longer probable to occur, the loss on the associated forward contract is recognized in earnings.
As of September 30, 2026, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $9.4 million, all of which met the requirements of ASC Topic 815 and were designated as hedges.
As of December 31, 2025, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $27.2 million, all of which met the requirements of ASC Topic 815 and were designated as hedges.
As of September 30, 2026, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars:
Maturity date (Dollar amounts in thousands of U.S. dollars)Notional amount of U.S. dollarsWeighted average exchange rate of U.S.
dollars		Fair value Asset (Liability)
October - December 20269,372 1.4021 (95)
9,372 1.4021 (95)
Fair value of derivative instruments and effect of derivative instruments on financial performance
The effects of these derivative instruments on our Condensed Consolidated Financial Statements were as follows (amounts presented do not include any income tax effects).
Fair value of derivative instruments in the Condensed Consolidated Balance Sheets
Derivatives (Dollar amounts in thousands of U.S. dollars)Balance Sheet LocationAs of September 30, 2026 Fair
Value Asset (Liability)		As of December 31, 2025 Fair Value
Asset (Liability)
Foreign Currency forward contracts designated as cash flow hedges (net)Derivative instruments$(95)$(75)
Total foreign currency forward contracts (net)Derivative instruments$(95)$(75)
Movement in Accumulated other comprehensive income (AOCI) balance for the three months ended September 30, 2026 (Dollar amounts in thousands of U.S. dollars)
Gains and losses on cash flow hedgesTax impactTotal AOCI
Opening AOCI Balance - June 30, 2026$(171)$41 $(130)
Other comprehensive income (loss) before reclassifications91 (22)69 
Amount reclassified from AOCI(15)4 (11)
Other comprehensive income (loss) for the three months ended September 30, 202676 (18)58 
Ending AOCI Balance - September 30, 2026$(95)$23 $(72)
Movement in AOCI balance for the nine months ended September 30, 2026 (Dollar amounts in thousands of U.S. dollars)
Gains and losses on cash flow hedgesTax impactTotal AOCI
Opening AOCI balance - December 31, 2025$(79)$22 $(57)
Other comprehensive income (loss) before reclassifications(313)72 (241)
Amount reclassified from AOCI297 (71)226 
Other comprehensive income (loss) for the nine months ended September 30, 2026(16)1 (15)
Ending AOCI Balance - September 30, 2026$(95)$23 $(72)
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Effects of derivative instruments on income and AOCI for the three months ended September 30, 2026 and 2025 are as follows (Dollar amounts in thousands of U.S. dollars)

Derivatives in Cash Flow Hedging RelationshipAmount of Gain or (Loss) Recognized in
OCI, net of tax, on
Derivative		Location of Gain or (Loss) Reclassified
from AOCI into Income		Amount of Gain or (Loss) Reclassified
from AOCI into Income
Operating expenses$12 
Foreign currency forward contracts for the three months ended September 30, 2026$69 Cost of revenues$3 
Operating expenses$(129)
Foreign currency forward contracts for the three months ended September 30, 2025$(916)Cost of revenues$(33)
Effects of derivative instruments on income and AOCI for the nine months ended September 30, 2026 and 2025 are as follows (Dollar amounts in thousands of U.S. dollars)
Derivatives in Cash Flow Hedging RelationshipAmount of Gain or (Loss) Recognized in
OCI, net of tax, on Derivative		Location of Gain or (Loss) Reclassified
from AOCI into Income		Amount of Gain or (Loss) Reclassified
from AOCI into Income
Operating expenses$(233)
Foreign currency forward contracts for the nine months ended September 30, 2026$(241)Cost of revenues$(64)
Operating expenses$(815)
Foreign currency forward contracts for the nine months ended September 30, 2025$(239)Cost of revenues$(202)
5. Property and Equipment
Property and equipment consist of the following (Dollar amounts in thousands of U.S. dollars):
September 30,
2026		December 31,
2025
Computer equipment$25,994 $26,665 
Computer software1,654 2,041 
Capitalized internal use software66,609 60,233 
Furniture and equipment1,465 1,662 
Vehicles and tools4,816 5,010 
Fiber network (1)
277,649 272,713 
Customer equipment and installations34,681 28,010 
Land1,109 1,109 
Buildings9,314 9,389 
Assets under construction3,119 8,246 
Leasehold improvements428 428 
426,839 415,506 
Less:
Accumulated depreciation162,968 133,551 
$263,871 $281,955 
(1) Fiber network is presented net of $0.2 million of government grants ($0.1 million as of December 31, 2025), with an impact of less than $0.1 million on accumulated depreciation ($0.1 million as of December 31, 2025).
Depreciation of property and equipment (Dollar amounts in thousands of U.S. dollars):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Depreciation of property and equipment$10,212 $10,405 $30,425 $31,404 
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Impairment of Property and Equipment
During the three months ended September 30, 2026 and September 30, 2025, the Company recognized a total impairment expense of nil and $10.9 million, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized total impairment expense of $0.6 million and $11.5 million, respectively.
In the third quarter of 2025, management completed a review of remaining construction assets following the implementation of the 2024 Capital Efficiency Plan. As part of this review, certain assets were determined to no longer be usable or recoverable in ongoing operations or future network builds. Management concluded that these assets met the definition of ‘assets disposed of by abandonment’ under ASC 360-10.
As part of this assessment, management re-evaluated the estimated salvage values of the abandoned construction assets based on current market conditions and expected recoveries. This reassessment resulted in a reduction in estimated recoverable amounts, and a corresponding write-down was recorded to reflect the updated estimates as of September 30, 2025.
In total, $14.9 million of abandoned computer equipment and assets under construction were impaired, with an estimated salvage value of $4.9 million, resulting in a recorded impairment charge of $10.0 million for the three and nine months ended September 30, 2025. This charge is recorded within “Impairment of property and equipment” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Additionally, an impairment loss of $0.7 million was recognized related to ROU assets which is discussed under the "Note 13. Leases".
The Company recognized impairment charges on specific network assets that were identified through routine inspections as damaged and no longer in use of $0.2 million and $0.8 million for the three and nine months ended September 30, 2025, respectively, and nil and $0.6 million for the three and nine months ended September 30, 2026, respectively. These charges are recorded in “Network, other costs” in the Condensed Consolidated Statements of Operations and Comprehensive Loss, which is included in cost of revenues.
Asset Dispositions

During the third quarter of 2026, the Company sold property and equipment and intangibles for gross proceeds of $0.4 million. The net book value of the assets at the time of the sales was $0.4 million, resulting in a gain of less than $0.1 million, which is included in "(Gain) loss on disposition of property and equipment" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
During the nine months ended September 30, 2026, the Company sold property and equipment and intangibles for gross proceeds of $2.4 million. The net book value of the assets at the time of the sales was $3.2 million, resulting in a loss of $0.8 million, which is included in "(Gain) loss on disposition of property and equipment" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
During the third quarter of 2025, the Company sold property and equipment and intangibles for total consideration of $8.5 million, comprising cash proceeds and a $0.4 million indemnification holdback. The net book value of the assets at the time of the sales was $4.5 million, resulting in a gain of $4.0 million, which is included in "(Gain) loss on disposition of property and equipment" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
During the nine months ended September 30, 2025, the Company sold property and equipment and intangibles for gross proceeds of $20.8 million, comprising cash proceeds and a $1.0 million indemnification holdback. The net book value of the assets at the time of the sales was $15.0 million, resulting in a gain of $5.8 million, which is included in "(Gain) loss on disposition of property and equipment" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
6. Goodwill and Other Intangible Assets
Goodwill:
Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.
The Company's Goodwill balance remained consistent at $130.4 million as of September 30, 2026 and December 31, 2025. The Company's goodwill relates 83% ($107.7 million) to the Tucows Domains operating segment and 17% ($22.7 million) to the Ting operating segment.
Goodwill is not amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present. No impairment charge was recognized during the three and nine months ended September 30, 2026 and 2025.
Other Intangible Assets:
Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized but are subject to annual impairment assessments and more frequently if events or changes in circumstances indicate that the assets may be impaired. As part of the normal renewal evaluation process during the periods ended September 30, 2026 and September 30, 2025, the Company assessed that all domain names that were originally acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal, should be renewed.
Finite-life intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to fifteen years. The weighted average remaining amortization period for all finite-life intangible assets is 2.6 years.
For the three and nine months ended September 30, 2026, the Company acquired customer relationship assets through hosting agreements for nil and $0.9 million. These assets are being amortized over seven years.
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Net book value of acquired intangible assets consists of the following (Dollar amounts in thousands of U.S. dollars):
Surname domain namesBrandCustomer relationshipsTechnologyNetwork rights (1)Total
Amortization periodIndefinite life7 years3 - 7 years2 - 7 years15 years
Balances, June 30, 2026$12,260 $20 $5,271 $582 $622 $18,755 
Disposals from domain portfolio, net(2)- - - - (2)
Amortization expense- (2)(515)(155)(24)(696)
Balances, September 30, 2026$12,258 $18 $4,756 $427 $598 $18,057 
Surname domain namesBrandCustomer relationshipsTechnologyNetwork rights (1)Total
Amortization periodIndefinite life7 years3 - 7 years2 - 7 years15 years
Balances, December 31, 2025$12,263 $90 $5,787 $893 $670 $19,703 
Acquisition of customer relationships- - 856 - - 856 
Disposals from domain portfolio, net(5)- - - - (5)
Amortization expense- (72)(1,887)(466)(72)(2,497)
Balances, September 30, 2026$12,258 $18 $4,756 $427 $598 $18,057 
(1) Includes less than $0.1 million of indefinite life intangible assets.

The following table shows the estimated amortization expense for each of the next 5 years and thereafter, assuming no further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):
Year ending, December 31
Remainder of 2026$696 
20272,065 
20281,689 
2029475 
2030320 
Thereafter534 
Total$5,779 
7. Long Term Debt
2023 Credit Facility
On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto (the “Lenders”), to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”). The Borrowers may request an increase to the Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00. In connection with the 2023 Credit Facility, the Company incurred $0.9 million of fees paid to the Lenders and $0.3 million of legal fees related to the debt issuance. These fees were reflected as a reduction to the carrying amount of the loan payable and were fully amortized over the term of the 2023 Credit Agreement.
On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extended the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remained unchanged; however, the Extension Agreement amended certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees were reflected as a reduction to the carrying amount of the loan payable and were being amortized over the term of the agreement from September 2025 to September 2027.
On July 27, 2026, the Company entered into a third amendment to the 2023 Credit Agreement (the “Third Amendment”). The Third Amendment extended the maturity date of the 2023 Credit Facility from September 22, 2027 to July 27, 2029, except with respect to the commitment of one syndicate member in the amount of $27.5 million, which continues to mature on September 22, 2027 unless assigned to a replacement lender. The Company has commenced discussions to replace this lender with an existing or new syndicate member. The outstanding balance attributable to this lender’s commitment is classified as a current liability, as its maturity now falls within twelve months of the balance sheet date. The Company is required to maintain a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75:1.00 and an Interest Coverage Ratio of not less than 3.00:1.00. The Third Amendment amends the negative covenants to permit the Company to make investments in the Ting business, subject to specified conditions and the existing financial covenants. In connection with the Third Amendment, the Company incurred $0.6 million of fees paid to the Lenders and a $0.1 million arrangement fee paid to the Agent. These fees have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the extended term from September 2026 to July 2029.
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During the three and nine months ended September 30, 2026, the Company made repayments of $6.0 million. During the three and nine months ended September 30, 2025, the Company made repayments of $2.5 million and $5.0 million, respectively, on the 2023 Credit Facility.
2023 Credit Facility Terms
The 2023 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2023 Credit Facility requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75:1.00; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the Third Amendment) of not less than 3.00:1.00. Required principal repayments of $21.1 million and $163.3 million are due in September 2027 and July 2029, respectively.
During the three and nine months ended September 30, 2026, and September 30, 2025 the Company was in compliance with the covenants under its credit agreements in effect at the time. During the three and nine months ended September 30, 2026 and September 30, 2025, the Company recognized $0.1 million, and $0.1 million, $0.3 million and $0.4 million of interest expense related to the amortization of the debt issuance costs of the 2023 Credit Facility, respectively.
Borrowings under the 2023 Credit Facility will accrue interest and standby fees based on the Company's Total Funded Debt to Adjusted EBITDA ratio and the availment type as follows:
If Total Funded Debt to Adjusted EBITDA is:
Availment type or feeLess than 2.00Greater than or equal to 2.00
and less than 2.75		Greater than or equal to 2.75
and less than 3.50		Greater than or equal to 3.50
and less than 3.75
Canadian dollar borrowings based on the Canadian overnight repo rate average or U.S. dollar borrowings based on SOFR and letter of credit fees (Margin)1.50 %2.00 %2.50 %3.00 %
Canadian borrowings based on Prime Rate or Canadian or U.S. dollar borrowings based on Base Rate (Margin)0.25 %0.75 %1.25 %1.75 %
Standby fees0.30 %0.40 %0.50 %0.60 %
The following table summarizes the Tucows businesses excluding Ting's borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Principal$184,400 $190,400 
Less: unamortized debt discount and issuance costs(1,202)(869)
Total loan payable183,198 189,531 
Less: loan payable, current portion21,056 - 
Loan payable, long term portion$162,142 $189,531 
Unused Commitments and Lines of Credit

As of September 30, 2026, the 2023 Credit Facility provided for aggregate borrowings of up to $240.0 million of which $184.4 million was drawn and $4.3 million was committed to letters of credit, leaving $51.3 million available for future borrowings.
8. Notes Payable
2023 Term Notes
On May 4, 2023 (the “Closing Date”), Tucows Inc. through its indirect and wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction. On the Closing Date, Ting Issuer LLC, a Delaware limited liability company (the “Issuer”), a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company issued (i) $168,357,000 of its 5.95% Secured Fiber Revenue Notes, Series 2023-1, Class A-2, (ii) $23,289,000 of its 7.40% Secured Fiber Revenue Notes, Series 2023-1, Class B and (iii) $46,859,000 initial principal amount of 9.95% Secured Fiber Revenue Notes, Series 2023-1, Class C, together, the “2023 Term Notes”. The offering was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the issuance of the 2023 Term Notes were $220.5 million, after deducting a debt discount of $11.2 million and issuance costs of $6.7 million.
The debt discount and issuance costs of the 2023 Term Notes are being amortized using the straight-line method over a five-year period between the Closing Date and the anticipated repayment date.
The 2023 Term Notes are issued under an indenture, dated May 4, 2023 (the “Base Indenture”) between the Issuer and Citibank, N.A., as trustee (the “Indenture Trustee”) as supplemented by the Series 2023-1 supplemental indenture dated May 4, 2023, (the “Series 2023-1 Supplement” and, together with the Base Indenture, the “Indenture”), between the Issuer and the Indenture Trustee. Interest payments on the 2023 Term Notes are payable on a monthly basis. The legal final maturity date of the 2023 Term Notes is in April of 2053, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2023 Term Notes will be in April 2028. If the Issuer has not repaid or refinanced the 2023 Term Notes prior to the anticipated repayment date, additional interest will accrue on the 2023 Term Notes in an amount equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of the following exceeds the original interest rate of such 2023 Term Note (i) the yield to maturity (adjusted to a “mortgage equivalent basis” pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00%, plus (iii) (x) for the 2023 Class A-2 Notes, 3.50%, (y) for the 2023 Class B Notes, 5.00% and (z) for the 2023 Class C Notes, 7.82%.
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2024 Term Notes
On August 20, 2024, Tucows Inc., through its indirect and wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction. On August 20, 2024, Ting Issuer LLC, the Issuer, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued: (i) $55,000,000 of its 5.63% Secured Fiber Revenue Notes, Series 2024-1, Class A-2 (the “2024 Class A-2 Notes”), (ii) $8,000,000 of its 6.85% Secured Fiber Revenue Notes, Series 2024-1, Class B (the “2024 Class B Notes”), and (iii) $16,000,000 initial principal amount of 9.15% Secured Fiber Revenue Notes, Series 2024-1, (the “Class C Notes” together with the 2024 Class A-2 Notes and the 2024 Class B Notes, the “2024 Term Notes”). The Tranche C notes were not sold in this transaction. The net proceeds from the issuance of the 2024 Term Notes were $61.0 million, after deducting a debt discount of nil and issuance costs of $2.0 million.
The 2024 Term Notes were issued under the Base Indenture (the “Base Indenture”) dated May 4, 2023, and the related Series 2024-1 Supplement (the “Series 2024-1 Supplement”), dated August 20, 2024, by and between the Issuer, the asset parties thereto, and Citibank, N.A., as trustee (in such capacity, the “Indenture Trustee”) and securities intermediary. The Base Indenture and the Series 2024-1 Supplement allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein. Interest payments on the 2024 Term Notes are payable on a monthly basis. The legal final maturity date of the 2024 Term Notes is in August of 2054, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2024 Term Notes will be in August 2029.
The debt discount and issuance costs of the 2024 Term Notes are being amortized using the straight-line method over a five-year period between August 20, 2024 and the anticipated repayment date.
The 2023 Term Notes and 2024 Term Notes are secured by certain of the Company’s revenue-generating assets, consisting principally of fiber-network related agreements, fiber-network assets and customer contracts (collectively, the “Securitized Assets”) that are owned by certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as the guarantors (collectively with the Issuer, the “Obligor”) under the Base Indenture. The 2023 Term Notes and 2024 Term Notes are subject to a series of covenants, restrictions and other investor protections including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the 2023 Term Notes and 2024 Term Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, (iii) certain indemnification payments, (iv) the guarantors comply with standard bankruptcy-remoteness covenants, including not guaranteeing or being liable for other affiliates debts or liabilities, and (v) covenants relating to recordkeeping, access to information, and similar matters.
As of September 30, 2026, the Company was in compliance with all required covenants. As of September 30, 2026, the Company’s scheduled principal repayments for the 2023 Term Notes of $238.5 million is due in April 2028 and 2024 Term Notes of $63.0 million is due in August 2029.
During the three and nine months ended September 30, 2026, the Company recognized $1.0 million and $3.0 million, respectively, and during the three and nine months ended September 30, 2025, the Company recognized $1.0 million and $3.0 million, respectively, of interest expense related to the amortization of the debt discount and issuance costs of the 2023 Notes and 2024 Notes.
The following table summarizes Ting's borrowings under the 2023 and 2024 Term Notes (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Principal$301,505 $301,505 
Less: unamortized issuance costs(3,275)(4,589)
Less: unamortized discount(3,588)(5,270)
Notes payable, long-term portion(1)
$294,642 $291,646 
(1)During each of the three and nine months ended September 30, 2026, the Company capitalized less than $0.1 million of interest expenses pertaining to the 2023 and 2024 Term Notes directly attributable to the development of certain Assets Under Construction ("AUC") assets. Comparatively, for each of the three and nine months ended September 30, 2025, the Company capitalized $0.1 million and $0.2 million of interest expenses pertaining to the 2023 Term Notes and 2024 Term Notes directly attributable to the development of certain AUC assets, respectively.
Restricted Cash
Under the terms of the Indenture, revenues generated from the Securitized Assets are deposited into accounts controlled by the Indenture Trustee within two business days of receipt. The Company has no access to or control of the funds held in trust until they are disbursed by the Indenture Trustee on the 20th day of each calendar month (the “Payment Date”). In accordance with the Indenture, on each Payment Date the Indenture Trustee disburses, on behalf of the Obligor, administration fees to service providers, interest payments to the noteholders, liquidity reserve top-ups (if required), and the remaining funds to accounts controlled by the Obligor. Funds held in trust with the Indenture Trustee at the reporting date are presented as “Restricted cash” on the Company’s Condensed Consolidated Balance Sheet.
As of September 30, 2026, and December 31, 2025, Restricted cash totaled $5.1 million and $5.3 million, respectively.
Under the terms of the Indenture, the Company is also required to maintain a liquidity reserve fund equal to the sum of (A) six times the total amount of fund administration fees payable on each payment date after May 20, 2023 and (B) six times the total amount of monthly interest on the 2024 and 2023 Term Notes due and payable on each payment date after May 20, 2023. The liquidity reserve is maintained with the Indenture Trustee until the maturity of the 2024 and 2023 Term Notes and the balance is presented as “Secured notes reserve funds” on the Company’s Condensed Consolidated Balance Sheet.
As of September 30, 2026, and December 31, 2025, secured notes reserve funds totaled $11.1 million and $12.2 million, respectively.
9. Income Taxes
The Company’s provision for income taxes for interim periods is determined by using an estimated annual effective tax rate, adjusted for discrete items arising during the quarter. At each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to volatility due to several factors, including accurately forecasting the Company’s net loss before tax, taxable loss, the mix of tax jurisdictions to which they relate, intercompany transactions, and changes in statutes, regulations, and case law.

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For the three and nine months ended September 30, 2026, the Company recorded an income tax expense of $2.0 million and $7.5 million, on net loss before income taxes of $8.3 million and $41.3 million respectively, using an estimated effective tax rate for the fiscal year ending December 31, 2026. Our effective tax rates for the three and nine months ended September 30, 2026 differ from the U.S. federal statutory rate primarily due to an increase in valuation allowance on net operating losses, the impact of foreign earnings and tax return adjustments.

Comparatively, for the three and nine months ended September 30, 2025, the Company recorded an income tax expense of $2.5 million and $6.9 million, on net loss before income taxes of $20.6 million and $46.9 million, respectively, using an estimated effective tax rate for the fiscal year ending December 31, 2025. Our effective tax rates for the three months and nine months ended September 30, 2025 differ from the U.S. federal statutory rate primarily due to an increase in valuation allowance on net operating losses and the impact of foreign earnings.

10. Basic and Diluted Loss per Common Share:
The following table reconciles the numerators and denominators of the basic and diluted loss per common share computation (Dollar amounts in thousands of U.S. dollars, except for share data):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Numerator for basic and diluted loss per common share:
Net loss for the period$(10,273)$(23,019)$(48,851)$(53,789)
Denominator for basic and diluted loss per common share:
Basic and diluted weighted average number of common shares outstanding11,182,254 11,079,486 11,152,102 11,053,725 
Basic and diluted loss per common share$(0.92)$(2.08)$(4.38)$(4.87)
For the three and nine months ended September 30, 2026, the Company recorded a net loss, thus all outstanding options were considered anti-dilutive and excluded from the computation of diluted loss per common share.
For the three and nine months ended September 30, 2025, the Company recorded a net loss, thus all outstanding options were considered anti-dilutive and excluded from the computation of diluted loss per common share.
11. Revenue
Significant accounting policy
The Company’s revenues are derived from (a) the provisioning of retail fiber Internet services through Ting, (b) the CSP solutions and professional services through Wavelo; and (c) domain name registration contracts, other domain related value-added services, domain sale contracts, and other advertising revenue through Tucows Domains Services. Certain revenues are disclosed under Corporate and other as they are considered non-core business activities including retail mobile services, Transition Services Agreement ("TSA") revenue and eliminations of intercompany revenue. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as contract liabilities. All products are generally sold without the right of return or refund.
Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.
Nature of goods and services
The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, see "Note 14. Segment Reporting".
(a)Ting
The Company generates Ting revenues primarily through the provisioning of fixed high-speed Internet access, and the design and construction of fiber optic network assets for a specific customer.
Ting Internet contracts provide customers Internet access at their home or business through the installation and use of our fiber optic network. Ting Internet contracts are generally prepaid and grant customers with unlimited bandwidth based on a fixed price per month basis. Because consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access. Though the Company does not consider the installation of fixed Internet access to be a distinct performance obligation, the fees related to installation are immaterial and therefore revenue is recognized as billed.
Ting Internet access services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. Incentive marketing credits given to customers are recorded as a reduction of revenue.
The Company records expected refunds, rebates and credit card charge-backs as a reduction of revenues at the time of the sale based on historical experiences and current expectations.
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Our construction services relate to revenue earned from the design, construction and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.
Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets.
The Company has determined that it acts as principal in providing construction services, as it is primarily responsible for fulfilling the contract, controls construction inputs, and bears the risk associated with design, materials procurement, and subcontracted construction activities. Accordingly, construction revenue is recognized on a gross basis.
(b)Wavelo
The Company generates Wavelo revenues by providing billing and provisioning platform services to CSPs to whom we also provide other professional services.
Platform service agreements contain both platform services and professional services. Platform services offer a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools through a single, cloud-based service. Professional services provided under platform service arrangements can include implementation, training, consulting or software development/modification services. Platform services and professional services are considered to be separate performance obligations.
Consideration under platform service arrangements includes both a variable component that changes each month depending on the number of subscribers hosted on the platform, as well as a fixed component of platform payments and credits.
Platform payments and associated credits are allocated between the platform services and professional services performance obligations by estimating the standalone selling price (“SSP”) of each performance obligation.
The Company estimates the SSP of professional services based on observable standalone sales. The SSP of platform services is derived using the residual approach by estimating the total contract consideration and subtracting the SSP of professional services.
Each month of providing access to the platform is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, therefore, the performance obligation consists of a series of distinct service periods. Accordingly, the platform services represent a single promise to provide continuous access (i.e. a stand-ready performance obligation) to the platform. The platform payment revenue allocated to platform services is recognized evenly over the term of the contract. Variable subscriber fees are allocated to the platform services and are recognized as the fees are invoiced.
Revenues related to professional services are distinct from the other promises in the contract(s) and are recognized as the related services are performed, on the basis of hours consumed.
Other professional services consist of professional service arrangements with platform services customers which are billed based on separate Statement of Work (“SOW”) arrangements for bespoke feature development. Revenues for professional services contracted through separate SOWs are recognized at a point-in-time when the final acceptance criteria have been met.
(c)Tucows Domains
The Company generates Tucows Domains revenues primarily through Wholesale Domains Services, Wholesale Value Added Services and Retail.
Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
Wholesale Value Added Services comprise Domain-related value-added services provided to resellers, as well as expiry and advertising revenue streams.
Retail services comprise Domain registration contracts provided to retail customers along with related email and WHOIS privacy services.
The Company is an Internet Corporation for Assigned Names and Numbers ("ICANN") accredited registrar. The Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
Domain registration and WHOIS Privacy Services
Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Though fees are collected upfront, revenue from domain registrations is recognized ratably over the registration period as the Company provides the customer with a domain registration service, which represents a distinct performance obligation satisfied over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.
WHOIS Privacy is an ongoing service that protects the personal information of Registrants from public access.
Tucows Registry Services
Tucows Registry Services (“TRS”) provides registry platform and related technical services to operators of generic top-level domains (“gTLDs”), branded top-level domains, and country code top-level domains. These services include processing domain name transactions and maintaining the related infrastructure and support systems required to operate the registry. Revenue is primarily transaction-based and is calculated as a fixed fee per financial transaction processed during the month.
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Because customers simultaneously receive and consume the benefits of the registry services as they are provided, revenue is recognized in the period in which the transactions occur. Service level credits are treated as variable consideration and are recorded as a reduction of revenue in the period in which they are incurred.
Value Added Services
Domain related value-added services like digital certificates and hosted email provide our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.
Expiry
The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. The domain expiry stream involves domain names whose registration has expired and as per ICANN regulations are placed into a 40-day grace period. Though the domain names do not belong to the registrant during the 40-day grace period, the Company is restricted from allowing others to register them. The Company monetizes its domain expiry stream both through the sale of names and by allowing advertisers to place parked pages advertisements on the domains. Revenue from the sale of domain-name rights through the domain expiry stream is recognized at a point in time when control of the domain-name rights is transferred to the customer.
Advertising
Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct web traffic from the Company’s domain expiry stream domains, surname domains and direct navigation domains to advertising websites. Compensation from Internet advertising publishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variable consideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.
Disaggregation of Revenue

The following is a summary of the Company’s revenue earned from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services$18,021 $16,976 $52,612 $49,701 
Construction revenue4,282 - 10,660 - 
Total Fiber22,303 16,976 63,272 49,701 
Wavelo:
Platform Services11,725 11,856 35,041 35,908 
Total Wavelo11,725 11,856 35,041 35,908 
Tucows Domains:
Wholesale
Domain Services48,875 51,888 146,514 153,448 
Value Added Services5,088 6,107 16,850 17,767 
Total Wholesale53,963 57,995 163,364 171,215 
Retail9,945 9,842 29,637 29,481 
Total Tucows Domains63,908 67,837 193,001 200,696 
Corporate and other*:
Mobile Services and eliminations2,039 1,889 5,874 5,325 
$99,975 $98,558 $297,188 $291,630 
*Corporate and other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280 Segment Reporting ("ASC 280"). Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.
During the three and nine months ended September 30, 2026, one customer within the Wavelo segment accounted for 11% of the Company's total revenue amounting to $11.1 million and $33.3 million, respectively. During the three and nine months ended September 30, 2025, one customer within the Wavelo segment accounted for 12% of the Company's total revenue amounting to $11.3 million and $34.4 million, respectively.
At September 30, 2026, one customer represented 46% of accounts receivables. As of December 31, 2025, one customer represented 44% of total accounts receivable.
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The following is a summary of the Company’s cost of revenue from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services$7,418 $6,478 $20,436 $21,021 
Construction revenue3,175 - 8,429 - 
Total Fiber10,593 6,478 28,865 21,021 
Wavelo:
Platform Services326 88 1,044 320 
Total Wavelo326 88 1,044 320 
Tucows Domains:
Wholesale
Domain Services38,906 41,793 116,472 123,368 
Value Added Services318 450 960 1,386 
Total Wholesale39,224 42,243 117,432 124,754 
Retail4,281 4,380 12,844 12,953 
Total Tucows Domains43,505 46,623 130,276 137,707 
Corporate and other*:
Mobile Services and eliminations(223)4,641 9,172 13,012 
Network Expenses:
Network, other costs6,513 5,855 18,619 17,488 
Network, depreciation and amortization cost10,134 10,692 30,171 32,260 
Total Network Expenses16,647 16,547 48,790 49,748 
$70,848 $74,377 $218,147 $221,808 
*Corporate and other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.
Contract Balances
The following table provides information about contract liabilities from contracts with customers. The Company accounts for contract assets and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly.
Some of the Company’s long-term contracts with customers are billed in advance of service, such as domain contracts and some professional service contracts. Consideration received from customers related to performance obligations which have not yet been satisfied are recorded as contract liabilities.
Contract liabilities primarily relate to the portion of the transaction price received in advance related to the unexpired term of domain name registrations and other domain related value-added services, on both a wholesale and retail basis, net of external commissions.
Significant changes in contract liabilities for the nine months ended September 30, 2026 and year ended December 31, 2025 were as follows (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Balance, beginning of period$152,935 $156,804 
Contract liabilities187,544 275,540 
Recognized revenue(189,586)(279,409)
Balance, end of period$150,893 $152,935 
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Remaining Performance Obligations
As the Company fulfills its performance obligations, the following table includes revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2026 (Dollar amounts in thousands of U.S. dollars):
Remainder of 2026$61,413 
202784,315 
202818,124 
202910,650 
20309,149 
Thereafter38,516 
Total$222,167 
The table above presents the aggregate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration greater than one year. These amounts primarily relate to fixed consideration associated with long-term customer contracts and are expected to be recognized as the related performance obligations are satisfied over the remaining contract terms.
For retail mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration of one year or less (typically one month), the Company has elected to apply a practical expedient to not disclose revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).
Although domain registration contracts are deferred over the lives of the individual contracts, which can range from one to ten years, approximately 86% of our contract liabilities balance related to domain contracts is expected to be realized within the next twelve months.
Professional services revenue related to platform services agreements is deferred and recognized as hours are incurred over the contract term. Any revenue for unused professional service hours is recognized as revenue at the end of the contract period.
12. Costs to obtain and fulfill a contract
(a)Deferred costs of acquisition
We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the period of benefit of those costs to be longer than one year and those costs are expected to be recoverable under the term of the contract. We have identified certain sales incentive programs and other customer acquisition fees that meet the requirements to be capitalized, and therefore, capitalized them as contract costs in the amount of $2.6 million at September 30, 2026.
Capitalized contract acquisition costs are amortized into operating expense typically over three years, based on the transfer of goods or services to which the assets relate.
The breakdown of the movement in the deferred costs of acquisition balance for the nine months ended September 30, 2026 and the year ended December 31, 2025 is as follows (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Balance, beginning of period$2,252 $2,333 
Capitalization of costs1,645 1,777 
Amortization of costs(1,285)(1,858)
Balance, end of period$2,612 $2,252 
(b)Deferred costs of fulfillment
Deferred costs to fulfill contracts primarily consist of domain registration costs which have been paid to a domain registry and are capitalized as deferred costs of fulfillment. These costs are deferred and amortized over the life of the domain which generally ranges from one to ten years. The Company also defers certain technology design and data migration costs it incurs to fulfill its performance obligations contained in our platform services arrangements. There were no impairment losses recognized in relation to the costs capitalized during the nine months ended September 30, 2026. Amortization expense is included in cost of revenue.
The breakdown of the movement in the deferred costs of fulfillment balance for the nine months ended September 30, 2026 and year ended December 31, 2025 is as follows (Dollar amounts in thousands of U.S. dollars).
September 30, 2026December 31, 2025
Balance, beginning of period$113,034 $116,975 
Deferral of costs140,376 188,420 
Amortized expense included in cost of revenue(139,967)(192,361)
Balance, end of period$113,443 $113,034 
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13. Leases
The Company leases datacenters, corporate offices, warehouses and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases.
The Company's leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year .
The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Operating lease expense (leases with a total term greater than 12 months)$4,192 $2,793 $11,958 $7,545 
Short-term lease expense (leases with a total term of 12 months or less)- 15 - 28 
Variable lease expense553 162 1,619 537 
Total lease expense$4,745 $2,970 $13,577 $8,110 
Lease expense is presented in general and administrative expenses and network expenses within our Condensed Consolidated Statements of Operations and Comprehensive Loss.
Variable lease payments are determined based on specific terms and conditions outlined in the lease agreements. These may include payments for utilities, which are based on actual usage, and maintenance costs, which are determined based on expenses incurred. They also include amounts payable to Ting’s network partners that vary with subscriber activity or revenue, such as per-subscriber fees and service fees calculated as a percentage of retail revenue in excess of contractual minimums.
Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Supplemental cash flow information:2026202520262025
Operating lease - operating cash flows (fixed payments)$5,698 $2,610 $12,279 $6,706 
Operating lease - operating cash flows (liability reduction)3,859 1,556 7,363 4,428 
New right of use assets - operating leases9,241 15,263 35,675 28,209 
Supplemental balance sheet information related to leases:September 30, 2026December 31, 2025
Weighted average discount rate8.97 %8.79 %
Weighted average remaining lease term17.72 years15.32 years
Maturity of lease liability as of September 30, 2026 (Dollar amounts in thousands of U.S. dollars):
September 30, 2026
Remaining of 2026$3,611 
202712,230 
20289,578 
20298,811 
20308,213 
Thereafter116,374 
Total future lease payments158,817 
Less imputed interest80,432 
Total$78,385 
Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that are reasonably certain of being exercised.
The Company has agreements with several third-party network partners who construct and operate fiber networks used to deliver our internet services. Under these arrangements, the partners build and activate new serviceable addresses each month. The financial terms of these arrangements may include fixed fees, variable fees, or a combination of both. The partners control and manage the construction. The Company does not control the construction process and is therefore not considered the owner during build out. The leases for these addresses will commence once the lessor makes the underlying assets available for the Company's use, to deliver services to its customers.
The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or if the re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised.
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During the quarter ended September 30, 2026 Ting Memphis Co. and mStreet Fiber Memphis, LLC entered into a Wholesale Master Service Agreement that terminated and replaced the 2023 Network Access and Use Agreement and reduced the Company's minimum lease commitments. The Company concluded that the arrangement continues to contain a lease and accounted for the change as a lease modification that is not a separate contract. Effective September 1, 2026, the Company remeasured the operating lease liability from $11.5 million to $3.1 million, and reduced the right-of-use asset from $9.2 million to $0.8 million. No gain or loss was recognized. The lease continues to be classified as an operating lease.
Impairment of ROU asset
During the quarter ended September 30, 2025, the Company recognized an impairment loss of $0.7 million related to two warehouse related ROU assets that were written down to their fair value. Management concluded that these assets met the definition of ‘assets disposed of by abandonment’ under ASC 360-10. In accordance with ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The impairment loss is recorded within “Impairment of property and equipment” in the Condensed Consolidated Statement of Operations and Comprehensive Loss and the related lease liabilities remain on the balance sheet and continue to be measured using the effective interest method.
14. Segment Reporting
Reportable operating segments
The Company is organized and managed based on three operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. No operating segments have been aggregated to determine the Company's reportable segments.
The Company's reportable operating segments and their principal activities consist of the following:
1.Ting - This segment derives revenue from providing retail high speed Internet access services to individuals and small businesses and the design and construction of fiber optic network assets for a specific customer. Revenues are generated in the United States.
2.Wavelo – This segment derives revenue from platform and other professional services related to communication service providers, including Mobile Network Operators and Internet Service Providers, and are primarily generated in the United States.
3.Tucows Domains – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; and the sale of retail Internet domain name registration and email services to individuals and small businesses. Tucows Domains revenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and ENom brands whereas it is primarily in European nations for Ascio and EPAG.
The Company's segmented results include shared services allocations, including a profit margin, for Finance, Human Resources and other technical services, to the operating units. In addition, Wavelo charges Ting a subscriber-based monthly charge for services rendered. Financial impacts from these allocations and cross segment charges are eliminated as part of the consolidation.
Key measure of segment performance
The CEO, as the chief operating decision maker ("CODM"), regularly reviews the operations and performance by segment. The CODM reviews Segment Adjusted EBITDA (as defined below) as (i) key measures of performance for each segment and (ii) to make decisions about the allocation of resources. Depreciation of property and equipment, amortization of intangible assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expenses, net are organized along functional lines and are not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the CODM.
The Company's key measure of segment performance is Segment Adjusted EBITDA.
The Company calculates this as segment revenue together with recurring income earned on sale of transferred assets, less cost of revenue, network expenses and certain operating expenses attributable to each segment, such as sales and marketing, technical operations and development, general and administration expenses. Segment Adjusted EBITDA excludes unrealized gains (losses) on foreign exchange, stock-based compensation and transactions that are not indicative of on-going performance, including acquisition, transaction and transition costs. Certain revenues and expenses are excluded from segment Adjusted EBITDA results as they are centrally managed and not monitored by or reported to the CODM by segment, including mobile retail services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.
The Company believes that Adjusted EBITDA is an important indicator of the operational strength and performance of its segments, by identifying those items that are not directly a reflection of each segment’s performance or indicative of ongoing operational and profitability trends.
The CODM uses Adjusted EBITDA to evaluate the overall recurring profitability of each operating segment after accounting for overhead costs. Adjusted EBITDA is evaluated by the CODM by comparing current period to historical and forecasted results and is used to inform strategic decisions over segment profitability, operational efficiency, pricing strategies, cost optimization, customer churn, competitor benchmarking and cash flow.
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Information by reportable segments (with the exception of disaggregated revenue, which is discussed in “Note 11. Revenue”), which is regularly reported to the chief operating decision maker, and the reconciliations thereof to the Company's income before taxes, are set out in the following tables (Dollar amounts in thousands of U.S. dollars):
TingWaveloTucows DomainsConsolidated Totals
For the Three Months Ended September 30, 2026
Revenue from external customers$22,303 $11,232 $63,908 $97,443 
Intersegment revenues (1)
- 493 - 493 
Total net revenues22,303 11,725 63,908 97,936 
Less:
Cost of revenues10,593 326 43,505 54,424 
Network, other costs (2)
1,157 2,285 2,335 5,777 
Sales and marketing (2)
5,074 2,166 3,908 11,148 
Technical operations and development (2)
402 1,704 2,555 4,661 
General and administrative (2) (3)
4,316 1,080 3,158 8,554 
Other segment items (4)
(745)(405)(2,617)(3,767)
Segment Adjusted EBITDA$1,506 $4,569 $11,064 $17,139 
TingWaveloTucows DomainsConsolidated Totals
For the Three Months Ended September 30, 2025
Revenue from external customers$16,976 $11,408 $67,837 $96,221 
Intersegment revenues (1)
- 448 - 448 
Total net revenues16,976 11,856 67,837 96,669 
Less:
Cost of revenues6,478 88 46,623 53,189 
Network, other costs (2)
1,428 2,232 1,819 5,479 
Sales and marketing (2)
5,021 2,404 3,869 11,294 
Technical operations and development (2)
510 2,109 1,893 4,512 
General and administrative (2) (3)
4,496 968 1,447 6,911 
Other segment items (4)
(75)(230)89 (216)
Segment Adjusted EBITDA$(882)$4,285 $12,097 $15,500 
TingWaveloTucows DomainsConsolidated Totals
For the Nine Months Ended September 30, 2026
Revenue from external customers$63,272 $33,587 $193,001 $289,860 
Intersegment revenues (1)
1,454 1,454 
Total net revenues63,272 35,041 193,001 291,314 
Less:
Cost of revenues28,865 1,044 130,276 160,185 
Network, other costs (2)
3,407 6,926 6,301 16,634 
Sales and marketing (2)
15,504 7,671 11,403 34,578 
Technical operations and development (2)
1,247 5,698 6,478 13,423 
General and administrative (2) (3)
13,449 3,302 7,943 24,694 
Other segment items (4)
(1,796)(613)(3,968)(6,377)
Segment Adjusted EBITDA$2,596 $11,013 $34,568 $48,177 
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TingWaveloTucows DomainsConsolidated Totals
For the Nine Months Ended September 30, 2025
Revenue from external customers$49,701 $34,589 $200,696 $284,986 
Intersegment revenues (1)
- 1,319 - 1,319 
Total net revenues49,701 35,908 200,696 286,305 
Less:
Cost of revenues21,021 320 137,707 159,048 
Network, other costs (2)
3,886 6,809 5,479 16,174 
Sales and marketing (2)
14,403 7,380 11,261 33,044 
Technical operations and development (2)
1,481 5,478 5,955 12,914 
General and administrative (2) (3)
14,384 2,478 4,294 21,156 
Other segment items (4)
(87)(651)(180)(918)
Segment Adjusted EBITDA$(5,387)$14,094 $36,180 $44,887 
(1)Intercompany revenues earned for provision of services on the ISOS and Subscriber Management ("SM") platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation.
(2)Effective beginning in 2026, Network, other costs, Sales and marketing, Technical operations and development and General and administrative costs presented in segment reporting to the CODM are shown excluding stock‑based compensation expenses for all business units. This presentation reflects a change from prior periods, in which stock‑based compensation expenses was included within each expense category and subsequently adjusted in “Other segment” line items. To ensure comparability, the 2025 segment expense figures have been recast to conform to the 2026 presentation.
(3)Effective beginning in 2026, General and administrative costs presented in segment reporting to the CODM are shown excluding Gains and losses from unrealized foreign currency. This presentation reflects a change from prior periods, in which gains and losses from unrealized foreign currency was included within each expense category and subsequently adjusted in “Other segment” line items. To ensure comparability, the 2025 segment expense figures have been recast to conform to the 2026 presentation.
(4)Other segment items for each reportable segment includes other income, as well as adjustments to add back (deduct) acquisition and transition costs, which are included in other line items but are excluded from our definition of Segment Adjusted EBITDA.

The following table reconciles Segment Adjusted EBITDA for the period to Net loss before tax for the three and nine months ended September 30, 2026 and September 30, 2025:
Reconciliation of Segment Adjusted EBITDA to Net loss before taxThree Months Ended September 30,Nine Months Ended September 30,
(In Thousands of U.S. Dollars)2026202520262025
Segment Adjusted EBITDA$17,139 $15,500 $48,177 $44,887 
Reconciling items:
Corporate and other (1)
1,415 (2,231)(5,659)(5,370)
Depreciation of property and equipment(10,212)(10,405)(30,425)(31,404)
Impairment and loss (gain) on disposition of property and equipment1 (6,920)(1,441)(5,771)
Amortization of intangible assets(696)(1,072)(2,497)(3,393)
Interest expense, net(10,689)(13,901)(39,004)(41,135)
Stock-based compensation(962)(1,387)(3,220)(4,278)
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities189 164 (32)601 
Acquisition and other costs (2)
(4,470)(311)(7,240)(1,039)
Net loss before tax$(8,285)$(20,563)$(41,341)$(46,902)
(1)Items that are centrally managed and not monitored by or reported to the CODM by segment, including retail mobile services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.
(2)Acquisition and other costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.
Revenue from sources outside of Canada and the United States of America comprises less than 10% of the Company's total operating revenue.
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(a) The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Canada$733 $797 
United States263,138 281,158 
$263,871 $281,955 
(b) The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Canada$281 $695 
United States5,518 6,745 
$5,799 $7,440 
Under ASC 326, "Financial Instruments - Credit Losses", the Company assesses the adequacy of its allowance for expected credit losses based on historical loss experience, current economic conditions and reasonable forecasts. The Company's evaluation considers the short-term nature of receivables and the high credit quality of the Company's customer base, which mitigates significant credit risk exposure.
(c) The following table summarizes the Company's expected credit losses ("ECL") (Dollar amounts in thousands of U.S. dollars):
Expected credit lossesBalance at beginning of periodIncrease in ECL provisionWrite-offs during periodBalance at end of the period
Nine months ended September 30, 2026$1,259 $361 $(695)$925 
Twelve months ended December 31, 2025$923 $370 $(34)$1,259 
15. Stockholders' Deficit
The following table summarizes stockholders' deficit transactions for the three and nine months ended September 30, 2026 (Dollar amounts in thousands of U.S. dollars):
Common stockAdditional
paid in
capital		Retained earnings
(Accumulated Deficit)		Accumulated
other
comprehensive
income (loss)		Total
stockholders'
deficit
NumberAmount
Balances, June 30, 202611,161,011 $39,205 $24,709 $(264,555)$(130)$(200,771)
Repurchase of subsidiary shares- - (74)- - (74)
Stock-based compensation(1)
35,969 414 451 - - 865 
Net loss- - - (10,273)- (10,273)
Other comprehensive income- - - - 58 58 
Balances, September 30, 202611,196,980 $39,619 $25,086 $(274,828)$(72)$(210,195)
Common stockAdditional
paid in
capital		Retained earnings
(Accumulated Deficit)		Accumulated
other
comprehensive
income (loss)		Total
stockholders'
deficit
NumberAmount
Balances, December 31, 202511,111,453 $38,308 $23,526 $(225,977)$(57)$(164,200)
Repurchase of subsidiary shares- - (74)- - (74)
Stock-based compensation(1)
85,527 1,311 1,634 - - 2,945 
Net loss- - - (48,851)- (48,851)
Other comprehensive loss- - - - (15)(15)
Balances, September 30, 202611,196,980 $39,619 $25,086 $(274,828)$(72)$(210,195)
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The following table summarizes stockholders' deficit transactions for the three and nine months ended September 30, 2025 (Dollar amounts in thousands of U.S. dollars):
Common stockAdditional
paid in
capital		Retained earnings
(Accumulated Deficit)		Accumulated
other
comprehensive
income (loss)		Total
stockholders'
deficit
NumberAmount
Balances, June 30, 202511,065,641 $37,429 $21,451 $(180,928)$362 $(121,686)
Stock-based compensation(1)
24,022 478 961 - - 1,439 
Net loss(23,019)- (23,019)
Other comprehensive loss- (793)(793)
Balances, September 30, 202511,089,663 $37,907 $22,412 $(203,947)$(431)$(144,059)
Common stockAdditional
paid in
capital		Retained earnings
(Accumulated Deficit)		Accumulated
other
comprehensive
income (loss)		Total
stockholders'
deficit
NumberAmount
Balances, December 31, 202411,014,655 $36,581 $19,241 $(150,158)$(964)$(95,300)
Exercise of stock options- - 31 - - 31 
Stock-based compensation(1)
75,008 1,326 3,140 - - 4,466 
Net loss- - - (53,789)- (53,789)
Other comprehensive income- - - - 533 533 
Balances, September 30, 202511,089,663 $37,907 $22,412 $(203,947)$(431)$(144,059)
(1)The Company capitalizes stock-based compensation costs directly attributable to the development of qualifying assets. Qualifying assets include internal use software (“IUS”), AUC, equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC 350 "Intangibles - Goodwill and Other" ("ASC 350"). During the three and nine months ended September 30, 2026, the Company capitalized less than $0.1 million of stock-based compensation directly attributable to the development of certain IUS assets. During the three and nine months ended September 30, 2025, the Company capitalized $0.1 million and $0.2 million of stock-based compensation directly attributable to the development of certain IUS assets.
2026 Stock Buyback Program
On February 12, 2026, the Company announced that its Board of Directors (“Board”) approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 13, 2026 and is expected to terminate on February 12, 2027. For the three and nine months ended September 30, 2026, the Company did not repurchase shares under this program.
2025 Stock Buyback Program

On February 13, 2025, the Company announced that its Board approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 14, 2025 and terminated on February 12, 2026. For the three and nine months ended September 30, 2026, the Company did not repurchase shares under this program.
2024 Stock Buyback Program
On February 22, 2024, the Company announced that its Board approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases were to be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 23, 2024 and terminated on February 22, 2025. For the three and nine months ended September 30, 2025, the Company did not repurchase shares under this program.
16. Share-based Payments
2006 Tucows Equity Compensation Plan
On November 22, 2006, the shareholders of the Company approved the Company’s 2006 Equity Compensation Plan (the “2006 Plan”), which was amended and restated effective July 29, 2010 and which serves as a successor to the 1996 Plan. The 2006 Plan has been established for the benefit of the employees, officers, directors and certain consultants of the Company. The maximum number of common shares which had initially been set aside for issuance under the 2006 Plan is 1.25 million shares. The plan was amended to increase the number of shares set aside for issuance by an additional 0.475 million shares, 0.75 million shares and 1.53 million shares in October 2010, September 2015 and November 2020, respectively, increasing the maximum to a total of 4.0 million shares. Generally, options issued under the 2006 Plan vest over a four-year period and have a term not exceeding seven years, except for automatic formula grants of non-qualified stock options, which vest after one year and have a five-year term. Prior to the September 2015 amendment to the 2006 Plan, automatic formula grants of non-qualified stock options vested immediately upon grant.
The Company's current equity-based compensation plans include provisions that allow for the “net exercise” of stock options by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. These transactions are accounted for by the Company as a purchase and retirement of shares.
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The fair value of each option grant ("Company Option") is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company calculates expected volatility based on historical volatility of the Company’s common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Tucows Inc. common shares at the date of grant.
Details of Company stock option transactions for the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period902,330 $37.26 1,046,219 $39.82 
Granted44,727 16.28 23,000 17.38 
Exercised- - - - 
Forfeited(7,825)23.66 (2,760)24.55 
Expired(11,638)48.28 (114,988)50.35 
Outstanding, end of period927,594 36.18 951,471 37.63 
Options exercisable, end of period657,274 $43.02 535,018 $52.34 
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period961,376 $39.65 1,122,700 $45.86 
Granted70,977 15.68 129,814 18.94 
Exercised- - - - 
Forfeited(17,500)22.95 (48,528)29.53 
Expired(87,259)59.98 (252,515)56.65 
Outstanding, end of period927,594 36.18 951,471 37.63 
Options exercisable, end of period657,274 $43.02 535,018 $52.34 
As of September 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Options outstandingOptions exercisable
Exercise priceNumber outstandingWeighted average
 exercise price per share		Weighted average
remaining contractual life
(years)		Aggregate intrinsic valueNumber exercisableWeighted average
exercise price per share		Weighted average
remaining contractual
life
(years)		Aggregate intrinsic
value
 $14.07 -$19.93
208,264 $17.39 5.5$- 91,822 $19.01 5.2$- 
 $20.25 - $28.37
360,364 22.69 4.5- 206,486 23.10 4.3- 
 $30.70 - $30.74
3,750 30.74 0.2- 3,750 30.74 0.2- 
 $40.04 - $48.00
128,465 42.00 2.7- 128,465 42.00 2.7- 
 $51.82 - $59.98
6,600 55.89 0.6- 6,600 55.89 0.6- 
 $60.01 - $68.41
76,328 60.01 0.6- 76,328 60.01 0.6- 
 $70.13 - $79.51
134,823 78.41 1.4- 134,823 78.41 1.4- 
 $80.61 - $82.07
9,000 80.61 2.0- 9,000 80.61 2.0- 
927,594 $36.18 3.6$- 657,274 $43.02 3.0$- 
Total unrecognized compensation cost relating to unvested stock options at September 30, 2026, prior to the consideration of expected forfeitures, is approximately $2.1 million and is expected to be recognized over a weighted average period of 2.2 years.
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2022 Wavelo Equity Compensation Plan
On November 9, 2022 the Board of Wavelo approved Wavelo's Equity Compensation Plan (“ECP”), which has been established for the benefit of the employees, officers, directors and certain consultants of Wavelo or Tucows. The Wavelo stock options were introduced in order to provide variable compensation that helps retain executives and ensures that our executives' interests are aligned with shareholders of the business to grow long-term value. The maximum number of Wavelo common shares which have been set aside for issuance under the 2022 Plan is 20 million shares. In June 2024, the Board approved an increase in the authorized share count to 120 million shares, with a corresponding increase in the option pool to 25 million shares. The options issued under the ECP primarily vest over a period of three years and have a seven-year term. For the initial grants under the plan, the first 25% became exercisable within three months and after the third year, the remaining 75% vest ratably monthly. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument. The Company recognizes forfeitures as they occur.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company calculates expected volatility based on the actual volatility of comparable publicly traded companies. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company assumes the expected dividend yield to be zero.
Details of Wavelo's stock option transactions for the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period15,543,795 $1.37 15,626,013 $1.33 
Granted- - 264,250 1.81 
Exercised- - - - 
Forfeited(23,500)1.80 (58,742)1.55 
Expired(213,393)1.32 (171,695)1.31 
Outstanding, end of period15,306,902 1.37 15,659,826 1.34 
Options exercisable, end of period13,331,509 $1.31 13,032,265 $1.28 
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period15,305,714 $1.33 15,887,997 $1.27 
Granted882,500 1.81 653,250 1.79 
Exercised- - (24,420)1.27 
Forfeited(71,107)1.64 (264,923)1.53 
Expired(810,205)1.29 (592,078)1.30 
Outstanding, end of period15,306,902 1.37 15,659,826 1.34 
Options exercisable, end of period13,331,509 $1.31 13,032,265 $1.28 
As of September 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Options outstandingOptions exercisable
Exercise priceNumber outstandingWeighted average
exercise price per share		Weighted average
remaining contractual life
(years)		Aggregate intrinsic valueNumber exercisableWeighted average
exercise price per share		Weighted average
remaining contractual life
(years)		Aggregate intrinsic
value
$0 -$1.81
15,306,902 $1.37 3.3$6,763 13,331,509 $1.31 3.1$6,708 
15,306,902 $1.37 3.3$6,763 13,331,509 $1.31 3.1$6,708 
Total unrecognized compensation cost relating to unvested stock options at September 30, 2026, prior to the consideration of expected forfeitures, is approximately $2.4 million and is expected to be recognized over a weighted average period of 2.8 years.
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2022 Ting Equity Compensation Plan
On January 16, 2023, the Board of Ting approved Ting's Equity Compensation Plan ("Ting ECP"), which has been established for the benefit of the employees, officers, directors and certain consultants of Ting or Tucows. The Ting stock options were introduced in order to provide variable compensation that helps retain executives and ensure that our executives' interests are aligned with shareholders of the business to grow the long-term value. The maximum number of Ting common units that have been set aside for issuance under the plan is 10 million units, currently there are 100 million common units outstanding. Generally, options issued under the Ting ECP vest over a four-year period and have a term not exceeding seven years. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. As option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Ting calculates expected volatility based on the actual volatility of comparable publicly traded companies. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company assumes the expected dividend yield to be zero.
Details of Ting's stock option transactions for the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period4,432,422 $6.00 4,717,769 $6.00 
Granted- - - - 
Exercised- - - - 
Forfeited- - (7,095)6.00 
Expired(5,166)6.00 - - 
Outstanding, end of period4,427,256 6.00 4,710,674 6.00 
Options exercisable, end of period4,403,830 $6.00 4,141,928 $6.00 
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
Number of sharesWeighted average exercise price per
share		Number of sharesWeighted average exercise price per
share
Outstanding, beginning of period4,646,012 $6.00 5,959,660 $6.00 
Granted- - - - 
Exercised- - - - 
Forfeited(73,759)6.00 (98,753)6.00 
Expired(144,997)6.00 (1,150,233)6.00 
Outstanding, end of period4,427,256 6.00 4,710,674 6.00 
Options exercisable, end of period4,403,830 $6.00 4,141,928 $6.00 
As of September 30, 2026, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):
Options outstandingOptions exercisable
Exercise priceNumber outstandingWeighted average
exercise price per share		Weighted average
remaining contractual life
(years)		Aggregate intrinsic valueNumber exercisableWeighted average
exercise price per share		Weighted average
remaining contractual life
(years)		Aggregate intrinsic value
$0 - $6.00
4,427,256 $6.00 3.5$- 4,403,830 6.03.5$- 
4,427,256 $6.00 3.5$- 4,403,830 6.03.5$- 
Total unrecognized compensation cost relating to unvested stock options at September 30, 2026, prior to the consideration of expected forfeitures, is less than $0.1 million and is expected to be recognized over a weighted average period of 0.6 years.
The Company recorded total stock-based compensation expense of $1.0 million and $3.2 million for the three and nine months ended September 30, 2026, respectively. The Company recorded total stock-based compensation expense of $1.4 million and $4.3 million for the three and nine months ended September 30, 2025, respectively. The details of the Company's stock-based compensation expense are as follows:
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Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Company options$733 $985 $2,532 $3,035 
Wavelo options131 427 399 1,322 
Ting options110 30 332 91 
Capitalized stock based compensation(12)(55)(43)(170)
Total stock based compensation expense$962 $1,387 $3,220 $4,278 
During the three and nine months ended September 30, 2026 and September 30, 2025, the Company capitalized less than $0.1 million, $0.1 million, less than $0.1 million and $0.2 million, respectively, of stock based compensation directly attributable to the development of certain IUS assets.
17. Fair Value Measurement
For financial assets and liabilities recorded in our financial statements at fair value we utilize a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Equity investments without readily determinable fair values include ownership rights that do not provide the Company with control or significant influence. Such equity investments are recorded at cost, less any impairment, and adjusted for subsequent observable price changes as of the date that an observable transaction takes place. Subsequent adjustments are recorded in other income (expense), net.
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of September 30, 2026 (Dollar amounts in thousands of U.S. dollars):
September 30, 2026
Fair Value Measurement UsingAsset (Liability)
at Fair value
Level 1Level 2Level 3
Derivative instrument asset (liability), net$- $(95)$- $(95)
Total assets (liabilities), net$- $(95)$- $(95)
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of December 31, 2025 (Dollar amounts in thousands of U.S. dollars):
December 31, 2025
Fair Value Measurement Using
Asset (Liability)
at Fair value
Level 1
Level 2
Level 3
Derivative instrument asset (liability), net$- $(75)$- $(75)
Total assets (liabilities), net$- $(75)$- $(75)
18. Other income (expense)
On August 1, 2020, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and between the Company and DISH Wireless L.L.C. ("EchoStar", DISH's post-merger parent). Under the Purchase Agreement and in accordance with the terms and conditions set forth therein, the Company sold to EchoStar its mobile customer accounts that are marketed and sold under the Ting brand (other than certain customer accounts associated with one network operator) (“Transferred Assets”). For a period of 10 years following the execution of the Purchase Agreement, EchoStar will pay a monthly fee to the Company generally equal to an amount of net revenue received by EchoStar in connection with the transferred customer accounts minus certain fees and expenses, as further set forth in the Purchase Agreement.
The Company accounts for investment in entities over which it has the ability to exert significant influence, but does not control and is not the primary beneficiary of, using the equity method of accounting. The Company includes the proportionate share of earnings (loss) of the equity method investees in Other Income. The Company also incurred other non-operational expenses during the period amounting to less than $0.1 million.
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The Company recognized the amounts noted in the table below during the three and nine months ended September 30, 2026 and September 30, 2025.
(Dollar amounts in thousands of U.S. dollars)Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Income earned on sale of transferred assets$2,381 $3,020 $7,375 $8,873 
Equity in losses of unconsolidated businesses(138)(105)(199)(151)
Other income (expenses)(137)- (48)- 
Total other income, net$2,106 $2,915 $7,128 $8,722 
The following table provides additional information relating to Interest expense, net (Dollar amounts in thousands of U.S. dollars):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Interest expense$(10,940)$(14,428)$(39,768)(42,636)
Interest income251 527 764 1,501 
Interest expense, net$(10,689)$(13,901)$(39,004)(41,135)
19. Redeemable Preferred Units

Generate Exit Transaction

On July 27, 2026 (the "Closing"), Tucows entered into the Unit Purchase and Exit Agreement with Generate (the "Exit Agreement"), pursuant to which Tucows acquired all of the outstanding Series A Preferred Units of Ting from Generate, and the units were surrendered, cancelled and retired. The Company evaluated this transaction under ASC 470-60, Troubled Debt Restructurings by Debtors, and concluded that the partial settlement is within the scope of that guidance, as Ting was experiencing financial difficulties at the time of the restructuring and Generate granted a concession it would not otherwise have considered absent those difficulties.

The principal changes in terms effected by the Exit Agreement were the cancellation of Series A Preferred Units, which had a carrying amount, including accrued Preferred Return of $149.3 million immediately prior to the Closing, in exchange for $3.0 million in cash paid to Generate at Closing, together with certain contingent payment obligations payable by Ting and Tucows, each described below. In connection with the settlement, Generate waived and released all rights, powers and preferences associated with the Series A Preferred Units, including all redemption, mandatory-redemption, conversion and call rights, and withdrew all previously asserted notices, including a notice of Return Breach and Trigger Event delivered to the Company in December 2025.
The Exit Agreement includes a $2.0 million contingent payment obligation of Ting, payable to Generate if a separate option held by a Generate-affiliated entity to acquire certain Ting network assets is not exercised within its term (the “Option Expiry Payment”). The Exit Agreement also includes contingent obligations of Tucows to Generate consisting of (i) a payment of $5.0 million payable to Generate if the Company does not make a required $12.5 million investment in Ting within twelve months of Closing (the “Investment Shortfall Payment”); and (ii) a contingent payment equal to any excess proceeds from a qualifying sale of Ting within twelve months of Closing in excess of a specified threshold (the “Excess Proceeds Payment”).

Under ASC 470-60, the total future cash payments specified by the new terms, including contingent payments, are compared with the carrying amount of the obligation being restructured, without regard to the probability that the contingent payments will occur. No gain is recognized on a restructured payable involving indeterminate future cash payments as long as the maximum total future cash payments may exceed the carrying amount of the payable. The Company evaluated the Option Expiry Payment, the Investment Shortfall Payment and the Excess Proceeds Payment and concluded that each is a contingent payment within the scope of this guidance. As the Excess Proceeds Payment is not subject to a stated maximum, the maximum total future cash payments under the new terms is indeterminate, and accordingly, no gain was recognized on the restructuring for the three and nine months ended September 30, 2026.
The $3.0 million paid to Generate at Closing was recorded as a reduction of the carrying amount of the Series A Preferred Units. The remaining carrying amount of $146.1 million is presented as “Deferred gain on restructured debt” within current liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2026. This amount, net of any payments made, will be recognized in earnings when the contingencies are resolved or expire. Under the Exit Agreement, the contingent payment obligations related to the Excess Proceeds Payment and the Investment Shortfall Payment will resolve on or before July 27, 2027, and the contingent payment obligation related to the Option Expiry Payment of $2 million will resolve on or before December 24, 2027.
Series A Preferred Units
On August 8, 2022 (the “Effective Date”), Ting and certain affiliated entities (the "Ting Entities") entered into a Series A Preferred Unit Purchase Agreement (the “Unit Purchase Agreement”) with Generate; and certain affiliated entities (the "Generate Entities") and closed the transaction on August 11, 2022 (the “Transaction Close”). Ting issued and sold 10,000,000 Series A Preferred Units to Generate at $6.00 per unit, resulting in gross proceeds of $60.0 million. The investment provided an additional $140 million of capital commitments available to Ting over the subsequent three year period, if certain milestones were achieved.
On December 5, 2022, Ting issued and sold an additional 4,583,333 Series A Preferred Units for gross proceeds of $27.5 million. During the year ended December 31, 2023, Ting issued an aggregate of 5,833,333 additional Series A Preferred Units for gross proceeds of $35.0 million. On May 4, 2023, Ting redeemed 5,173,067 Series A Preferred Units for $45.7 million, including a make-whole premium of $14.7 million. The redemption was accounted for as a debt restructuring, and the associated loss was recognized in other income (expense).
Immediately prior to the closing of the Exit Agreement, 15,243,600 units were outstanding with an aggregate liquidation preference of $91.5 million, plus a make-whole premium should redemption occur before the fourth anniversary of the Transaction Close and are senior to the Ting common units with respect to sale, dissolution, liquidation or winding up of Ting.
Ting had the option to issue additional Series A Preferred Units through August 8, 2025, subject to milestone achievement. Until this date, Ting was required to pay a standby fee of 0.50% per annum on the undrawn commitment, payable quarterly.
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The Series A Preferred Units accrued a preferred return at 15% per annum, subject to adjustment between 13% and 17% based on certain project approval and contribution conditions. The preferred return accrued daily and compounded quarterly. The preferred return accrued during the first two years is not payable unless and until the Series A Preferred Units are redeemed. The preferred return accrued after the second anniversary of the Transaction Close is payable by Ting quarterly.
Ting incurred $0.8 million of legal fees related to the redeemable preferred unit issuance, which had been reflected as a reduction to the carrying amount of the redeemable preferred unit balance and was amortized to interest expense, net in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss over the expected six-year term of the instrument.
The liability was initially recorded at fair value and subsequently recorded at the present value of the settlement amount, which includes the preferred return payments required until the instrument's expected maturity on the sixth anniversary of the Transaction Close, August 10, 2028 using the implicit rate of return of the instrument, 15%. For the nine month period ended September 30, 2026, Ting recorded an interest expense of $12.1 million, the total of which was accreted. For the year ended December 31, 2025, Ting recorded an interest expense of $19.3 million, of which $14.7 million was accreted. Interest expense related to amortization of issuance costs was $0.1 million in each of those periods.
The following table summarizes the changes in Ting's redeemable preferred units and the remaining obligation to Generate arising from the Exit Agreement (Dollar amounts in thousands of U.S. dollars):
September 30, 2026December 31, 2025
Opening Balance$137,252 $122,556 
Add: Accretion of redeemable preferred units(1)
12,088 14,696 
Redeemable preferred units balance prior to restructuring149,340 137,252 
Less: Deferred preferred financing costs(223)(289)
Net carrying amount149,117 136,963 
Less: Cash paid to Generate(3,000)- 
Remaining carrying amount of the obligation146,117 - 
Less: Reclassified to deferred gain on restructured debt(146,117)- 
Total Redeemable preferred units$- $136,963 
(1)Ting capitalized interest expenses directly attributable to the development of qualifying assets. Qualifying assets include IUS, AUC, equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC 350. During the three and nine months ended September 30, 2026 Ting capitalized less than $0.1 million of interest expenses pertaining to the redeemable preferred units directly attributable to the development of certain AUC assets. During the three and nine months ended September 30, 2025 Ting capitalized $0.1 million and $0.2 million of interest expenses pertaining to the redeemable preferred units directly attributable to the development of certain AUC assets.

Return Breach and Trigger Event

On December 1, 2025, Ting received written notice from Generate asserting that a Return Breach had occurred due to Ting’s failure to pay the quarterly preferred return for the second and third quarter of 2025 and the failure to cure such nonpayment within 60 days of notice from Generate thereof. Generate further asserted that such Return Breach constituted a Trigger Event under the Ting Fiber LLC Amended and Restated Limited Liability Company Agreement, dated as of August 11, 2022 (the "LLC Agreement") and reserved its rights to pursue available remedies under the LLC Agreement and applicable law. Such remedies included the right to elect conversion of the Series A Preferred Units into common units of Ting and a call right to purchase certain fiber network assets of Ting at the lower of the fair market value of such assets, and the aggregate invested capital in such assets plus 10%. These rights were terminated in connection with the Exit Agreement.
Additionally, as a result of the Return Breach and related Trigger Event asserted by Generate on December 1, 2025, until the closing date of the Exit Agreement, Generate had the ability, at its option, to make a request for redemption of all Series A Preferred Units, requiring Ting to redeem all outstanding Series A Preferred Units within 30 days of such request (a "Redemption Request"). The redemption price under such a request included the original issue price, any unsatisfied preferred return, as well as a make-whole premium. As Ting would have been required to settle the obligation within 30 days of a Redemption Request being submitted, the redeemable preferred units were reclassified from long term to current liabilities in the Condensed Consolidated Balance Sheet as of December 31, 2025. If Ting did receive a Redemption Request from Generate, Ting would have been required to pay Generate an estimated $204.9 million, representing the redemption price. Generate never submitted a redemption request, and payment of the Redemption Price did not become due.

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20. 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 U.S. dollars):
Contractual Obligations for the period ended September 30, 2026Capital Purchase ObligationsPurchase Obligations (1)Total Obligations
Remainder of 2026$5,298 $1,579 $6,877 
2027- 5,619 5,619 
2028- 6,173 6,173 
2029- 4,239 4,239 
2030- 102 102 
Thereafter- 12 12 
$5,298 $17,724 $23,022 
(1)Purchase obligations include all other legally binding service contracts for mobile telephone services and other operational agreements to be delivered during the remainder of 2026 and subsequent years
(2)Purchase obligations include minimum revenue commitments of $16.3 million with the Company's Mobile Network Operator partner for the term of the agreement

(b)On February 9, 2015 Ting Fiber, Inc. (“Ting Fiber”) 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 2016, the City 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 30 years. As of September 30, 2026, the City has drawn $16.2 million and the City’s revenues from Ting exceeded the City’s debt service requirements. The Company does not believe it will be responsible for any shortfall in the remainder of 2026.
(c)On November 4, 2019 Ting entered into an access and use agreement with Netly, LLC (“Netly”). Netly was subsequently acquired by Ubiquity California, LLC ("Ubiquity"). The agreement establishes a twelve-year term wherein Ting will be granted the right to act as an Internet service provider for fiber-optic networks to be constructed in and around the cities of Solana Beach, Encinitas and Carlsbad California. Under the terms of the agreement, Ting will have a 3-year “Headstart” period over each completed segment of the network, whereby Ting shall be the exclusive provider of services to subscribers during the “Headstart” period. Netly is fully responsible for constructing, operating and maintaining a wholesale fiber optic network, as well as the financing of those activities.
Ting is responsible for paying a fee per subscriber to Netly, as well as an unlit door fee for each serviceable address not subscribed. Through a “take or pay” arrangement, Ting has agreed to certain minimum charges based on minimum subscriber rates. To the extent that construction of the fiber optic network is complete, our minimum commitments have been included in the contractual lease obligations in "Note 13. Leases". The Company has had an ongoing billing dispute with Netly regarding the rates and methodology under which it can invoice our Ting Fiber division for our operations. In July 2026, Netly executed a release of approximately $0.9 million of previously accrued amounts relating to periods prior to the settlement, in resolution of the dispute. The release did not require any payment by the Company and relates only to the historical disputed invoicing; Netly has agreed to apply a corrected invoicing methodology prospectively however the release does not cover invoices for periods after that date and the dispute remains open for periods since July 2026. As of September 30, 2026, the Company has accrued $0.2 million for amounts it considered probable and estimable.
(d)On January 7, 2022, Ting Fiber entered into a 25-year lease agreement with Colorado Springs Utilities (“CSU”), a municipally owned utility. The lease agreement named Ting Fiber the anchor tenant on a city-wide fiber network that is intended to pass a maximum of 275,000 homes in Colorado Springs, Colorado. CSU began construction in Q2 of 2023. The lease obligates Ting Fiber, and its ultimate parent the Company, to pay a per month fee for addresses passed by the network (as they are passed and become serviceable for customers to connect to the network) and for certain fiber infrastructure, including co-location space. Based on the Company's current projection of approximately 150,000 homes to be passed, total lease costs over the remaining term are estimated at approximately $322.8 million, however the minimum fees are variable based on the percentage completion of the fiber optic network and these costs may be higher should the timing of delivery or amount of addresses passed be different from our estimate. Future committed fees associated with completed portions of the network have been included in the contractual lease obligations. Future fees associated with portions of the network that have yet to be constructed have not been considered an unconditional purchase obligation. On October 21, 2026, Ting entered into agreements to assign this lease to Google Fiber Colorado, LLC and to terminate the Company’s parent guaranty, following closing and satisfaction of certain post-closing obligations to CSU. Closing is currently scheduled for March 31, 2027 and is subject to customary conditions. Until closing, Ting remains the tenant and the obligations described above continue to apply. See "Note 22. Subsequent Events" for further information.
(e)On May 11, 2022, Ting, entered into a "Rights-of-Way" agreement with the City of Alexandria, Virginia whereby the City granted Ting the right to install, place, construct, maintain, operate, upgrade, repair, and replace a Communications System to provide Broadband Services within the Public Rights-of-Way (a space in, upon, above, along, across, over and below the public and City-owned property that is used as a public rights-of-way) for a fee. Per the agreement, Ting is to pay the City throughout the 20-year term of the agreement, an amount equal to 3% of Ting's Broadband Revenues once the network is live, and subscribers are obtained, and this fee is to be paid on a quarterly basis. The agreement commenced once Ting Fiber launched its network in Alexandria in March 2023. Since these fees are currently variable in nature, they have not been considered an unconditional purchase obligation for the purposes of the table in Note 20(a).
(f)On November 1, 2023, the Company, entered into a Network Access and Use Agreement with Blue Suede Networks, LLC, (now mStreet Fiber Memphis, LLC), which granted Ting Fiber the right to use the fiber communications network to be constructed by Blue Suede Networks, LLC to provide high-speed broadband Internet Access services to end-user residential and small and medium sized business customers in the city of Memphis, Tennessee. On July 31, 2026, the Company and mStreet Fiber Memphis, LLC entered into a Wholesale Master Service Agreement, which terminated and replaced the original agreement without a termination penalty.
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The Wholesale Master Service Agreement reduced the Company's minimum commitments as disclosed in Note 13. Future fees associated with portions of the network that have not yet been constructed have not been considered an unconditional purchase obligation for the purposes of the table in Note 20(a).
(g) In connection with the Exit Agreement, on June 24, 2026, Ting, entered into an Option Purchase Agreement (the "Option Agreement") with Ubiquity, an entity affiliated with Generate. The Option Agreement grants Ubiquity an exclusive option to acquire specified Ting network assets, subscriber contracts and property access agreements located in Solana Beach, Encinitas and Carlsbad, California, for a fixed purchase price of $2.0 million. Ubiquity may exercise this option during an initial period of twelve months from June 24, 2026, which Ubiquity may elect to extend for a further six months.
(h) 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 September 30, 2026 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.
21. Additional Financial Information
The following tables provide additional financial information related to our Condensed Consolidated Financial statements:
Balance Sheet Information
Prepaid expenses and otherSeptember 30,
2026		December 31,
2025
Prepaid expenses and deposits$16,281 $24,177 
Income tax receivable642 111 
Inventory4,137 3,872 
Contract asset2,098 1,004 
Assets held for sale$- $211 
Prepaid expenses and other$23,158 $29,375 
Other Assets
Investments$2,012 $2,012 
Contract costs2,612 2,252 
Contract asset - long term- 114 
Total other assets$4,624 $4,378 
Accounts payable and accrued liabilities
Accounts payable$9,937 $9,898 
Accrued liabilities24,748 25,374 
Total accounts payable and accrued liabilities$34,685 $35,272 
Other Current Liabilities
Customer deposits$17,566 $17,369 
Accreditation fees payable577 594 
Income taxes payable1,407 2,802 
Other liabilities - current portion1,923 $- 
Total other current liabilities$21,473 $20,765 
Inventories
The components of the inventories as of September 30, 2026 and December 31, 2025 were as follows (Dollar amounts in thousands of U.S. dollars):
September 30,
2026
December 31,
2025
Raw materials$1,939 $1,923 
Finished goods2,198 1,949 
Total Inventories$4,137 $3,872 
22. Subsequent Events
(a) Ting Exit of Colorado Springs Market

On October 21, 2026 Ting, an indirect wholly owned subsidiary of Tucows Inc., entered into an Assignment, Assumption, Novation and Transition agreement (the "Novation Agreement") that will transfer to Google Fiber Colorado, LLC (“gFiber”) Ting’s rights and obligations as tenant under its Dark Fiber Network Lease Agreement with CSU, as of December 17, 2021, as amended (the “CSU Lease”).

Under the Novation Agreement, on March 31, 2027 (the "Closing Date"), Ting will assign the lease to gFiber, and gFiber will be substituted for Ting as tenant. CSU has irrevocably consented to the assignment and novation. gFiber will not assume any liability of Ting relating to periods before the Closing Date, and Ting
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will have no liability under the CSU Lease for obligations arising on or after the Closing Date. The closing is subject to customary conditions, including the absence of an uncured material breach by Ting of its transition obligations to each of CSU and gFiber, the absence of a material adverse change in the physical or operational condition of CSU’s network, the accuracy of the parties’ representations and warranties as of the Closing Date, and the absence of a pending order prohibiting the closing.

Under the CSU Lease, Ting leases dark fiber and colocation space on CSU’s municipal fiber network in Colorado Springs, Colorado and serves as an anchor internet service provider on that network. In connection with the CSU Lease, the Company executed and delivered to CSU a Parent Guaranty dated as of December 17, 2021 (the "Parent Guaranty"), guaranteeing the payment and performance of Ting's obligations under the lease. As disclosed in "Note 20. Commitments and Contingencies" Ting's aggregate payment obligations under the CSU Lease were estimated at approximately $322.8 million for the remaining term of the CSU Lease. Following the Closing Date and satisfaction of certain post-closing obligations to CSU, which are expected to occur by the end of April 2027, the Parent Guaranty will be terminated.

The Company is currently assessing the impact of these agreements on its consolidated financial statements. The agreements were entered into after September 30, 2026 and have not been reflected in these condensed consolidated financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” and other similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among other things, the competition we expect to encounter as our business develops and competes in a broader range of Internet services, the Company's foreign currency requirements, specifically for the Canadian dollar and Euro; Wavelo, and Ting subscriber growth and retention rates; the number of new, renewed and transferred-in domain names we register as our business develops and competes; the effect of a potential gTLD expansion by the ICANN on the number of domains we register and the impact it may have on related revenues; our belief regarding the underlying platform for our domain services; our expectation regarding the trend of sales of domain names; our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of our credit losses; our expectation regarding fluctuations in certain expense and cost categories; our expectations regarding liquidity and capital requirements of the Ting Internet business, as well as the outcome of any process to access strategic alternatives for this business; our expectations regarding the evaluation of our strategic alternatives for Ting; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the impact of cancellations of or amendments to market development fund programs under which we receive funds; our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; and general business conditions and economic uncertainty. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:
•Our ability to continue to generate sufficient working capital to meet our operating requirements;
•Our ability to service our debt commitments;
•Our ability to maintain a good working relationship with our vendors and customers;
•The ability of vendors to continue to supply our needs;
•Actions by our competitors;
•Our ability to attract and retain qualified personnel in our business and address operational efficiencies;
•Our ability to effectively manage our business;
•The effects of any material impairment of our goodwill or other indefinite-lived intangible assets;
•Our ability to obtain and maintain approvals from regulatory authorities on regulatory issues;
•Our ability to invest in the build-out of fiber networks into selected towns and cities to provide Internet access services to residential and commercial customers while maintaining the development and sales of our established services;
•Adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, including with respect to the impact of the Tax Cuts and Jobs Act of 2017 and, the Organization for Economic Cooperation and Development ("OECD") model global minimum tax rules;
•Our ability to effectively respond or comply with new data protection regulations and any conflicts that may arise between such regulations and our ICANN contractual requirements;
•The application of business judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given that the ultimate tax determination is uncertain;
•Our ability to effectively integrate acquisitions;
•Our ability to monitor, assess and respond to changing geopolitical and economic environments including rising inflation and interest rates, tariffs and trade disputes, and geopolitical conflict;
•Our ability to collect anticipated payments from EchoStar in connection with the 10-year payment stream that is a function of the margin generated by the transferred subscribers over a 10-year period pursuant to the terms of the Asset Purchase Agreement dated August 1, 2020 between the Company and DISH Wireless LLC ("EchoStar", DISH's post-merger parent) (the “EchoStar Purchase Agreement”);
•Our ability to maintain compliance with the operational and financial covenants of the 2023 and 2024 Notes as defined in "Note 8. Notes Payable" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this Quarterly Report, which provides the Company with financing to invest in the expansion of fiber networks;
•Our ability to maintain the safety and security of our systems and data;
•Our ability to successfully identify and implement any potential strategic alternatives for Ting;
•Pending or new litigation; and
•Factors set forth under the caption “Item 1A Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 12, 2026 (the “2025 Annual Report”) and in "Item 1A Risk Factors" in Part II of this Quarterly Report.
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This list of factors that may affect our future performance and financial and competitive position and the accuracy of forward-looking statements is illustrative, but it is by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements included in this document are based on information available to us as of the date of this document, and we assume no obligation to update these cautionary statements or any forward-looking statements, except as required by law. These statements are not guarantees of future performance.

We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.

OVERVIEW

Our mission is to provide simple useful services that help people unlock the power of the Internet.

    We accomplish this by reducing the complexity of our customers’ experience as they access the Internet (at home or on the go) and while using Internet services such as domain name registration, email and other Internet related services. We are organized into three operating and reporting segments - Ting, Wavelo, and Tucows Domains. Each segment is differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The Ting segment contains the operating results of our retail high speed Internet access operations, including its wholly owned subsidiaries - Cedar and Simply Bits. The Wavelo segment includes our platform and professional services offerings, as well as the billing solutions to Internet services providers ("ISPs"). Tucows Domains includes wholesale and retail domain name registration services, as well as value added services derived through our OpenSRS, ENom, Ascio, EPAG and Hover brands.

Our CEO, who is also our chief operating decision maker, regularly reviews the operating results of Ting, Wavelo and Tucows Domains as three distinct segments in order to make key operating decisions as well as evaluate segment performance. Certain revenues and expenses disclosed under the Corporate category are excluded from Segment Adjusted EBITDA results as they are centrally managed and not monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of finance and human resources that are centrally managed, legal and corporate Information Technology ("IT") shared services.

For the three months ended September 30, 2026 and September 30, 2025, we reported net revenue of $100.0 million and $98.6 million, respectively.
For the nine months ended September 30, 2026 and September 30, 2025, we reported net revenue of $297.2 million and $291.6 million, respectively.
Ting

Ting and its wholly owned subsidiaries - Cedar and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the
United States, with operations focused on serving existing markets. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Internet services to consumer and business customers. Revenues from Ting Internet are all generated in the U.S. and are billed on a monthly basis and have no fixed contract terms, aside from certain bespoke contracts with business customers.
As of September 30, 2026, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 161,400 partner infrastructure serviceable addresses and 64,000 active subscribers under its management; compared to having access to 126,000 owned infrastructure serviceable addresses, 88,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management as of September 30, 2025. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.
On July 27, 2026, the Company, Ting and certain of its affiliated entities, entered the Exit Agreement with Generate. Under the Exit Agreement, the Company acquired all of the Series A Preferred Units of Ting held by Generate for $3.0 million in cash, and the units were subsequently surrendered, cancelled and retired. The Exit Agreement also provides for certain contingent payments to Generate, which is included as the deferred gain on restructured debt as of September 30, 2026. The Exit Agreement resolved the conditions disclosed with respect to Trigger Event, including the accrued and unpaid preferred return and the Return Breach and corresponding Trigger Event asserted by Generate and described in the Company’s Current Report on Form 8-K filed on December 5, 2025 and the items discussed above in “Note 19. Redeemable Preferred Units” of the Notes to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report. As a result of the Exit Agreement, Generate ceased to be a preferred member of Ting, waived and released all rights, powers and preferences associated with the Series A Preferred Units (including all redemption, mandatory-redemption, conversion and call rights), and withdrew all outstanding notices, including the notice asserting a Return Breach and Trigger Event. The parties also exchanged mutual releases. The remaining carrying amount of the obligation of $146.1 million was deferred and is presented as “Deferred gain on restructured debt” in the Condensed Consolidated Balance Sheet, and will be recognized in earnings when the contingent payments are resolved or expire. See “Note 19. Redeemable Preferred Units” of the Notes to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report for further information.
Wavelo

Wavelo includes the provision of full-service platforms and professional services providing a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo's focus is to provide accessible telecom software to CSPs globally, minimizing network and technical barriers and improving Internet access worldwide. Wavelo's suite of flexible, cloud-based software simplifies the management of mobile and Internet network access, enabling CSPs to better utilize their existing infrastructure, focus on customer experience and scale their businesses faster. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform, and Ting integrating Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. The Wavelo segment also includes the Platypus brand and platform, our legacy billing solution for ISPs. The revenues from Wavelo's MONOS, ISOS, SM and professional services are all generated in the U.S. and our customer
agreements have set contract lengths with the underlying CSP. Similarly, Wavelo's revenues from Platypus are largely generated in the U.S., with a small portion earned
in Canada and other countries.

Tucows Domains

Tucows Domains includes wholesale and retail domain name registration services, as well as value added services derived through our OpenSRS, ENom, Ascio, EPAG, and Hover brands. Tucows Domains generates revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses. Tucows Domains revenues are attributed to the country in which the contract originates, which is primarily in Canada and the U.S for OpenSRS and ENom brands whereas it is primarily in European nations for Ascio and EPAG.

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Our primary distribution channel is a global network of approximately 32,000 resellers that operate in approximately 200 countries and who typically provide their customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of this network of resellers by providing the broadest portfolio of gTLD and country code top-level domain options and related services, a white-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces, comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. In addition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.

We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue and positive operating cash flow.

Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
Wholesale, primarily branded as OpenSRS, ENom, EPAG and Ascio, derives revenue from its domain name registration service Together the OpenSRS, ENom, EPAG and Ascio Domain Services manage 21.3 million domain names under the Tucows, ENom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 1.0 million since September 30, 2025.
Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, publishing tools and other value-added services. All of these services are made available to end-users through a network of web hosts, ISPs, and other resellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through expiry auction sale.

Retail, primarily the Hover and ENom portfolio of websites, including ENom, and ENom Central, derive revenues from the sale of domain name registration and email services to individuals and small businesses. Our retail domain services also include our Personal Names Service – based on over 34,000 surname domains – which allows roughly two-thirds of Americans to purchase an email address based on their last name. The retail segment now includes the sale of the rights to its portfolio of surname domains used in connection with our RealNames email service and our Exact Hosting Service, that provides Linux hosting services for individuals and small businesses.
KEY BUSINESS METRICS AND NON-GAAP MEASURES
We regularly review a number of business metrics, including the following key metrics and non-GAAP measures, to assist us in evaluating our business, measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and make strategic business decisions. The following tables set forth the key business metrics that we believe are the primary indicators of our performance for the periods presented:
Ting InternetSeptember 30,
20262025
(in '000's)
Internet subscribers accounts under management64 52 
Internet owned infrastructure serviceable addresses1
126 126 
Internet partner infrastructure serviceable addresses1
161.4 88 
(1)Defined as premises to which Ting has the capability to provide a customer connection in a service area.
Tucows DomainsSeptember 30,
20262025
(in 000's)
Total new, renewed and transferred-in domain name registrations provisions (1)
14,469 15,476 
Domains under management21,291 22,289 
(1)Includes all transactions processed under our accreditations for our resellers and our retail brands, as well as transactions processed on behalf of other registrars using our platform.

Adjusted EBITDA

Tucows reports all financial information in accordance with U.S. GAAP. Along with this information, to assist financial statement users in an assessment of our historical performance, we typically disclose and discuss a non-GAAP financial measure, Adjusted EBITDA, on investor conference calls and related events that excludes certain non-cash and other charges as we believe that the non-GAAP information enhances investors’ overall understanding of our financial performance, but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Please see discussion of Adjusted EBITDA as well as the Adjusted EBITDA reconciliation to net loss in the Results of Operations section below.
OPERATING OPPORTUNITIES, CHALLENGES AND RISKS
Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may be adversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may not always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement.
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Ting
As an ISP, we have invested and expect to continue to invest in selective fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH networks via public-private partnerships in communities we identify as having strong, unmet demand for FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that we may not fully recover these investments as a result of future technological and regulatory changes, competitive responses from incumbent local providers, and slower than expected market penetration or otherwise.
Strategic Review and Developments
During the year ended December 31, 2025, Ting initiated and currently continues a review process for the Ting business focused on evaluating strategic alternatives to optimize its capital structure and long-term operating model given the ongoing capital needs of Ting. This process has included the exploration of potential asset sales, partnership structures and other strategic transactions involving Ting’s fiber network assets. During the third quarter, Ting replaced its Memphis network agreement with a revised wholesale agreement. On October 21, 2026, Ting agreed to assign its Colorado Springs network lease to Google Fiber Colorado, LLC, with closing expected on March 31, 2027, subject to customary conditions. At closing, Ting will pay Colorado Springs Utilities $4.0 million. Following closing and satisfaction of certain post-closing obligations to CSU, which are expected to occur by the end of April 2027, the Company's parent guaranty will be released. Ting will continue to operate the Colorado Springs network until customers are migrated, expected no later than June 30, 2027. These exits are expected to reduce Ting's operating costs and eliminate long-term lease obligations.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on December 5, 2025, on December 1, 2025, Ting received written notice from Generate, the holder of Ting’s Series A Preferred Units, asserting that under the LLC Agreement, a Return Breach and a Trigger Event had occurred as a result of Ting’s failure to pay the quarterly preferred return for two consecutive quarters. Generate had reserved its right to pursue remedies available under the LLC Agreement and applicable law, including the ability to make a request for redemption of all Series A Preferred Units. Had Generate submitted a Redemption Request, Ting would have been required to redeem all outstanding Series A Preferred Units at the applicable redemption price, which was estimated at $204.9 million, within 30 days of such request. As a result of this contractual provision, the Series A Preferred Units were classified as current liabilities in the Company’s Consolidated Balance Sheet as of December 31, 2025. Generate did not submit a Redemption Request prior to the Exit Agreement described below.
On July 27, 2026, the Company, Ting and certain of its affiliated entities entered into the Exit Agreement with Generate. Under the Exit Agreement, Tucows acquired all of the outstanding Series A Preferred Units of Ting from Generate for $3.0 million in cash, and the units were surrendered, cancelled and retired. As a result, no Series A Preferred Units remain outstanding as of September 30, 2026, Generate is no longer a preferred member of Ting, and the redemption exposure associated with the Return Breach and Trigger Event no longer exists. Exit Agreement also provides for certain contingent payments to Generate. The remaining carrying amount of the obligation of $146.1 million, which includes these contingent payments, was deferred and is presented as “Deferred gain on restructured debt” in the Condensed Consolidated Balance Sheet. See “Note 19. Redeemable Preferred Units” of the Notes to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report for further information.
The Company does not believe that the Return Breach or Trigger Event had a material adverse impact on Ting’s day-to-day operations, customer service or network performance.
Wavelo

Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. With our external platform and professional services revenues concentrated to one customer in EchoStar, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships for any of our Platforms in the future. Additionally, our revenues as a platform provider are directly tied to the subscriber volumes of EchoStar's MVNO or MNO networks, and our profitability is contingent on the ability of EchoStar to continue to add subscribers, either from organic growth or from migration off legacy systems, onto our platforms.

Tucows Domains

The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a material risk for us. As new registrars are introduced, existing competitors expand service offerings and offer price discounts to gain market share, we face pricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructure and our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers.

Substantially all of our Tucows Domains revenue is derived from domain name registrations and related value-added services from wholesale and retail customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving with the introduction of new gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We have a relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth in our Tucows Domains revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent domain name registration and value added service renewal rates and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for both resellers and end-users. In addition, Tucows Domains also generate revenues through the sale of names from our portfolio of domain names and through the OpenSRS, ENom, and Ascio Domain Expiry Streams. Our domains under management and transactions saw a moderate decrease in the latter half of Fiscal 2025, largely as a result of select, low margin customers taking their business in-house. These fluctuations occur occasionally in our business, and with broad, diverse and global nature of our reseller base ensures that margin remains healthy, and will be augmented by the strategies discussed above to continue to grow our revenue base.
From time-to-time certain vendors provide us with market development funds to expand or maintain the market position for their services. Any decision by these vendors to cancel or amend these programs for any reason may result in payments in future periods not being commensurate with what we have achieved during past periods.

Other opportunities, challenges and risks

The Company is entitled to a long-term payment stream that is a function of the margin generated by the transferred subscribers over the 10-year term of the EchoStar Purchase Agreement executed in the fiscal year ended December 31, 2020 (“Fiscal 2020”). This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate. Additionally, given EchoStar controls the revenues and costs incurred
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associated with the acquired subscribers, there could arise a situation where profitability for the subscriber base is diminished either by lower price points or cost inflation.
Additionally, as part of the EchoStar Purchase Agreement, the Company retained a small number of customer accounts associated with one MNO agreement that was not reassigned to EchoStar at time of sale. We were subject to the minimum revenue commitments previously agreed to with this excluded MNO agreement. The Company was able to continue adding customers under the excluded MNO network in order to meet the commitment. However, with no direct ability to change customer pricing and limited ability to renegotiate contract costs or significant terms, the Company was unable to meet the minimum commitments with this MNO partner and incurred significant penalties through the prior year; and generated significant losses until the contract was renewed under different terms in August 2026. The initial contract obligation was completed in January 2026. Beyond the term of the contract, the agreement continued month-to-month thereafter, until the contract was renewed in August 2026 with more favorable per-subscriber rates to improve the margin profile associated with the business. The renewal provided a rerate credit for overcharges resulting from invoices issued at the previous rates from May to September 2026. It also includes a lower, more achievable Minimum Revenue Requirement ("MRR") at our current subscriber count, defers payment on the historical penalty that arose from the prior contract, and includes an earnback condition allowing us to reduce that payable over time should we meet certain usage requirements. As of September 30, 2026, the Company has earned back $0.1 million from this earnback program.

Critical Accounting Estimates

The preparation of our Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience, available market information, as applicable, and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company's control. Management evaluates its estimates on an on-going basis. There have been no material changes to the critical accounting estimates as previously disclosed in Part II, Item 8 of our 2025 Annual Report as of the reporting date.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AS COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 NET REVENUES

Ting

Ting and its subsidiaries, Cedar and Simply Bits, includes the provision of high-speed Internet access services to select towns throughout the United States. Our primary sales channel is through the Ting website. The primary focus of this segment is to provide reliable Gigabit Fiber and Fixed Wireless Internet services to consumer and business customers. Generally, Ting Internet services have no fixed contract terms, aside from certain bespoke contracts with business customers.

    The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. Since consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access within each reporting period. Incentive marketing credits given to customers are recorded as a reduction of revenue.
Our construction services generate revenue from the design, construction, and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed. Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets. Where services require installation, revenue is not recognized until a customer's service is billed.
In each case, the Company records a reduction of revenues that reflects expected refunds, rebates, and credit card charge-backs at the time of the sale based on historical experiences and current expectations.
Wavelo
Platform Services
Tucows' Platform Services include the following full-service platforms from Wavelo, including MONOS, ISOS, SM and our legacy Platypus ISP Billing software. Under each of these platforms there are a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools. Wavelo launched as a proven asset for CSPs, with EchoStar using Wavelo’s MONOS software to drive additional value within its Digital Operator Platform. More recently, Ting Internet has also integrated Wavelo’s ISOS and SM software to enable faster subscriber growth and footprint expansion. Wavelo's customers are billed monthly, on a postpaid basis. The monthly fees are variable, based on the volume of their subscribers utilizing the platform during a given month, to which minimums may apply. Customers may also be billed fixed platform fees and granted fixed credits as part of the consideration for long-term contracts. Consideration received is allocated to platform services and bundled professional services and recognized as each service obligation is fulfilled. Any fixed fees for Wavelo are recognized into revenue evenly over the service period, while variable usage fees are recognized each month as they are consumed. Professional services revenue is recognized as the hours of professional services granted to the customer are used or expire. When consideration for these platform services is received before the service is delivered, the revenue is initially deferred and recognized only as the Company performs its obligation to provide services. Likewise, if platform services are delivered before the Company has the unconditional right to invoice the customer, revenue is recognized as a Contract asset.
Other Professional Services
This revenue stream includes any other professional services earned in connection with the Wavelo business from the provision of standalone technology services development work. These are billed based on separate Statement of Work arrangements for bespoke feature development. The Company recognizes revenue at the point-in-time when the final acceptance criteria have been met.
Tucows Domains
The Company generates Tucows Domains revenues primarily through Wholesale Domains Services, Wholesale Value Added Services and Retail.
Wholesale Domains Services comprise Domain registration services provided to resellers, Tucows Registry Services and WHOIS Privacy Services.
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Wholesale Value Added Services comprise Domain-related value-added services provided to resellers, as well as expiry and advertising revenue streams.
Retail services comprise Domain registration contracts provided to retail customers along with related email and WHOIS privacy services.
The Company is an Internet Corporation for Assigned Names and Numbers accredited registrar. The Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
Domain registration and WHOIS Privacy Services
Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Though fees are collected upfront, revenue from domain registrations is recognized ratably over the registration period as the Company provides the customer with a domain registration service, which represents a distinct performance obligation satisfied over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.
WHOIS Privacy is an ongoing service that protects the personal information of Registrants from public access.
Tucows Registry Services
Tucows Registry Services provides registry platform and related technical services to operators of generic top-level domains, branded top-level domains, and country code top-level domains. These services include processing domain name transactions and maintaining the related infrastructure and support systems required to operate the registry. Revenue is primarily transaction-based and is calculated as a fixed fee per financial transaction processed during the month. Because customers simultaneously receive and consume the benefits of the registry services as they are provided, revenue is recognized in the period in which the transactions occur. Service level credits are treated as variable consideration and are recorded as a reduction of revenue in the period in which they are incurred.
Value Added Services
Domain related value-added services like digital certificates and hosted email provide our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.
Expiry
The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. The domain expiry stream involves domain names whose registration has expired and as per ICANN regulations are placed into a 40-day grace period. Though the domain names do not belong to the registrant during the 40-day grace period, the Company is restricted from allowing others to register them. The Company monetizes its domain expiry stream both through the sale of names and by allowing advertisers to place parked pages advertisements on the domains. Revenue from the sale of domain-name rights through the domain expiry stream is recognized at a point in time when control of the domain-name rights is transferred to the customer.
Advertising
Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct web traffic from the Company’s domain expiry stream domains, surname domains and direct navigation domains to advertising websites. Compensation from Internet advertising publishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variable consideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.
Corporate and other - Mobile services and eliminations
Although we still provide mobile telephony services to a small subset of customers retained through the Ting Mobile brand as part of the EchoStar Purchase Agreement executed in Fiscal 2020, this revenue stream no longer represents the Company's strategic focus going forward. Instead, we have transitioned towards being a platform provider for CSPs globally via Wavelo. Retail telephony services and transition services revenues are not part of our reportable segments under ASC 280 and their results are presented as part of the All Other category.
Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on the customer's selected rate plan, which can either be usage based or an unlimited plan. All rate plan options are charged to customers on a postpaid, monthly basis at the end of their billing cycle. All future revenues associated with Retail Mobile Services stream will only be for this subset of customers retained by the Company, as mentioned above. Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following each customer's monthly billing cycle. The Company's billing cycle for all Ting Mobile customers is computed based on the customer's activation date. In order to recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories are recognized when title and risk of loss is transferred to the customer and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
These mobile services revenue streams also include transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes revenue as the Company satisfies its obligations to provide transitional services.
As a form of consideration for the sale of the customer relationships, the Company receives a payout on the margin associated with the legacy customer base sold to EchoStar, over a period of 10 years. This has been classified as Other Income and not considered revenue in the current period.

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The following table presents our net revenues, by revenue source (Dollar amounts in thousands of U.S. dollars):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services$18,021 $16,976 $52,612 $49,701 
Construction revenue4,282 - 10,660 - 
Total Fiber22,303 16,976 63,272 49,701 
Wavelo:
Platform Services11,725 11,856 35,041 35,908 
Other professional services- - - - 
Total Wavelo11,725 11,856 35,041 35,908 
Tucows Domains:
Wholesale
Domain Services48,875 51,888 146,514 153,448 
Value Added Services5,088 6,107 16,850 17,767 
Total Wholesale53,963 57,995 163,364 171,215 
Retail9,945 9,842 29,637 29,481 
Total Tucows Domains63,908 67,837 193,001 200,696 
Corporate and other*:
Mobile Services and eliminations2,039 1,889 5,874 5,325 
$99,975 $98,558 $297,188 $291,630 
*Corporate and other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes
of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.
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The following table presents our net revenues, by revenue source, as a percentage of total net revenues (Dollar amounts in thousands of U.S. dollars):
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services18%17%18%17%
Construction revenue4 %0%4 %0%
Total Fiber22%17%22%17%
Wavelo:
Platform Services12%12%12%12%
Other professional services0%0%0%0%
Total Wavelo12%12%12%12%
Tucows Domains:
Wholesale
Domain Services49%53%48%53%
Value Added Services5%6%6%6%
Total Wholesale54%59%54%59%
Retail10%10%10%10%
Total Tucows Domains64%69%64%69%
Corporate and other*:
Mobile services and eliminations2%2%2%2%
100%100%100%100%
*Corporate and other includes revenues from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes
of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.

Total net revenues for the three months ended September 30, 2026 increased by $1.4 million, or 1%, to $100.0 million when compared to the three months ended September 30, 2025. The increase in net revenue was driven by Ting and Mobile Services and eliminations; partially offset by a decline in revenues from Tucows Domains and Wavelo. The Ting segment increased $5.3 million in the current period as a result of new construction revenue in Laguna Woods Village, California, United States, as well as from subscriber growth on our Fiber network across the United States. Mobile Services and eliminations increased by $0.2 million, also attributable to subscriber growth. The Tucows Domains segment decreased $3.9 million primarily driven by a decline in domain names under management, as well as expiry auction revenue. The Wavelo segment decreased $0.1 million in the current period primarily driven by a decrease in subscribers under management.
Total net revenues for the nine months ended September 30, 2026 increased by $5.6 million, or 2%, to $297.2 million when compared to the nine months ended September 30, 2025. The increase in net revenue was driven by Ting and Mobile Services and eliminations; partially offset by a decline in revenues from Tucows Domains and Wavelo. The Ting segment increased $13.6 million in the current period as a result of new construction revenue in Laguna Woods Village, California, United States, as well as from subscriber growth on our Fiber network across the United States. Mobile Services and eliminations increased by $0.5 million attributable to subscriber growth. The Tucows Domains segment decreased $7.7 million primarily driven by a decline in domain names under management, as well as expiry auction revenue. The Wavelo segment decreased $0.9 million in the current period primarily driven by fewer bundled professional services hours recognized in the current period.
Contract liabilities at September 30, 2026, decreased by $2.0 million to $150.9 million from $152.9 million at December 31, 2025. This was primarily driven by Ting with the drawdown of previously deferred revenue recognized based on construction progress for the Laguna Woods Village project. This was partially offset by Tucows Domains due to the seasonal pattern of renewals being billed and deferred in the first half of the year, with the balance being drawn down and reaching its lowest balance towards the end of the year, resulting in a higher Tucows Domains contract liabilities balance at September 30, 2026 compared to December 31, 2025, despite the decline in domain names under management.
During both the three and nine months ended September 30, 2026, a customer, EchoStar, within our Wavelo segment accounted for 11% of total net revenues. EchoStar accounted for 11.5% of total net revenues during both the three and nine months ended September 30, 2025. EchoStar accounted for 46% of total accounts receivable at September 30, 2026 and 44% of total accounts receivable at December 31, 2025.
Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables, management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Our allowance for doubtful accounts was $0.9 million as of September 30, 2026 and $1.3 million as of December 31, 2025. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.
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Ting
Ting generated $22.3 million in net revenue during the three months ended September 30, 2026, up $5.3 million, or 31%, compared to the three months ended September 30, 2025. This growth is driven primarily by new construction revenue and service revenue from Laguna Woods Village, California, United States, as well as from subscriber growth across our Fiber network and the continued growth of available serviceable addresses in Ting towns throughout the United States.
Ting generated $63.3 million in net revenue during the nine months ended September 30, 2026, up $13.6 million, or 27%, compared to the nine months ended September 30, 2025. This growth is driven primarily by new construction revenue and service revenue from Laguna Woods Village, California, United States, as well as from subscriber growth across our Fiber network and the continued growth of available serviceable addresses in Ting towns throughout the United States.
As of September 30, 2026, Ting Internet had access to 126,000 owned infrastructure serviceable addresses, 161,400 partner infrastructure serviceable addresses and 64,000 active subscribers under its management; compared to having access to 126,000 owned infrastructure serviceable addresses, 88,000 partner infrastructure serviceable addresses and 52,000 active subscribers under its management as of September 30, 2025. These figures exclude any changes in serviceable addresses and accounts attributable to Simply Bits.
Wavelo
Platform Services
Net revenues from Wavelo Platform Services for the three months ended September 30, 2026, decreased by $0.1 million, or 1%, to $11.7 million as compared to the three months ended September 30, 2025. The decrease in net revenue is driven by a decrease in subscribers under management. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and other - Mobile Services and Eliminations.
Net revenues from Wavelo Platform Services for the nine months ended September 30, 2026, decreased by $0.9 million, or 2%, to $35.0 million as compared to the nine months ended September 30, 2025. The decrease in net revenue is driven by fewer bundled professional services hours recognized in the current period. This decrease was partially offset by a performance excellence bonus received from EchoStar. Intersegment revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation. The elimination impact is presented below in Corporate and other - Mobile Services and Eliminations.
Other Professional Services
Net revenues from Other Professional Services was nil for both the three months ended September 30, 2026 and September 30, 2025, as well as the nine months ended September 30, 2026 and the nine months ended September 30, 2025. These revenues relate to the provision of standalone technology services development work for our CSP customers and are non-recurring and often one-time in nature, and expectedly can fluctuate period over period. These revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers.
Tucows Domains
Wholesale - Domain Services
During the three months ended September 30, 2026, Wholesale domain services net revenue decreased by $3.0 million, or 6%, to $48.9 million as compared to the three months ended September 30, 2025. Decreases from Wholesale domain services domain registrations were driven by lower billings due to a decline in domain names under management since September 30, 2025.
During the nine months ended September 30, 2026, Wholesale domain services net revenue decreased by $6.9 million, or 5%, to $146.5 million as compared to the nine months ended September 30, 2025. Decreases from Wholesale domain services domain registrations were driven by lower billings due to a decline in domain names under management since September 30, 2025.
As of September 30, 2026, together, the OpenSRS, ENom, EPAG, and Ascio Domain Services manage 21.3 million domain names under the Tucows, ENom, EPAG and Ascio ICANN registrar accreditations and for other registrars under their own accreditations. Domains under management have decreased by 1.0 million since September 30, 2025, driven by some resellers migrating management of their domains in-house.
Wholesale - Value Added Services
During the three months ended September 30, 2026, value-added services net revenue decreased by $1.0 million, or 17%, to $5.1 million as compared to the three months ended September 30, 2025. The decrease in value-added service revenue was primarily driven by lower expiry auction revenue, which is historically inconsistent and difficult to predict, as well as storefront revenue reclassified from value-added services to wholesale, and a small decrease in certificate sales.
During the nine months ended September 30, 2026, value-added services net revenue decreased by $0.9 million, or 5%, to $16.9 million as compared to the nine months ended September 30, 2025. The decrease in value-added service revenue was primarily driven by lower expiry auction revenue, which is historically inconsistent and difficult to predict, as well as a small decrease in certificate sales.
Retail
During the three months ended September 30, 2026, retail domain services net revenue increased by $0.1 million, or 1%, to $9.9 million as compared to the three months ended September 30, 2025. This was driven by an increase in portfolio sales and Exact hosting revenue, offset by a decrease in legacy ENom retail names revenue.
During the nine months ended September 30, 2026, retail domain services net revenue increased by $0.2 million, or less than 1%, to $29.6 million as compared to the nine months ended September 30, 2025. This was primarily driven by increased Hover retail names revenue, offset by the decline in portfolio sales and legacy ENom retail names revenue.
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Corporate and other - Mobile Services and Eliminations
Net revenues from Mobile Services and eliminations for the three months ended September 30, 2026 increased by $0.2 million or 8%, to $2.0 million as compared to the three months ended September 30, 2025. This was driven by subscriber growth across both Ting and Mobile Services.
Net revenues from Mobile Services and eliminations for the nine months ended September 30, 2026 increased by $0.5 million or 10%, to $5.9 million as compared to the nine months ended September 30, 2025. This was driven by subscriber growth across both Ting and Mobile Services.
COST OF REVENUES
Ting
Cost of revenues primarily includes the costs for provisioning high speed Internet access for Ting and its subsidiaries, Cedar and Simply Bits, which is comprised of network access fees paid to third-parties to use their network, leased circuit costs to directly support enterprise customers, personnel and related expenses (excluding costs eligible for capitalization) for the physical planning, design, construction, and build out of the physical Fiber network, and as well as personnel and related expenses (excluding costs eligible for capitalization) for the installation, activation, repair, maintenance and overall field service delivery of the Ting business. Other costs include field vehicle expenses, and small sundry equipment and supplies consumed in building the Fiber network.
Cost of revenues for construction services relate to costs for the design, construction, and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.
Wavelo
Platform Services
Cost of revenues to provide the MONOS, ISOS and SM platforms, as well as our legacy Platypus ISP Billing software services including network access, provisioning and billing services for CSPs. This includes the amortization of any capitalized contract fulfillment costs over the period consistent with the pattern of transferring network access, provisioning and billing services to which the cost relates. Additionally, this includes any fees paid to third-party public cloud hosting or other service providers for customer-specific platform deployment or delivery costs.
Other Professional Services
Cost of revenues to provide standalone technology services development work to our CSP customers to help support their businesses. This includes any personnel and contractor fees for any client service resources retained by the Company. Only a subset of the Company's employee base provides professional services to our customers. This cost reflects that group of resources.
Tucows Domains
Wholesale - Domain Services
Cost of revenues for domain registrations represents the amortization of registry and accreditation fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds with the provision of the services during the period. Market development fund rebates, provided by registries as incentives for certain top-level domains, are reflected as a reduction to cost of goods sold in the month they are received.
Wholesale - Value-Added Services
Costs of revenues for value-added services include licensing and royalty costs related to the provisioning of certain components for hosted email and fees paid to third-party hosting services. Fees payable for trust certificates and storefront customer domains are amortized on a basis consistent with the provision of service, generally one year, while email hosting fees and monthly printing fees are included in cost of revenues in the month they are incurred.
Retail
Costs of revenues for our provision and management of Internet services through our retail site, Hover.com, include the amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are recorded as prepaid domain registry fees and are expensed ratably over the renewal term. Costs of revenues for our surname portfolio represent the amortization of registry fees for domains added to our portfolio over the renewal period, which is generally one year, the value attributed under intangible assets to any domain name sold and any impairment charges that may arise from our assessment of our domain name intangible assets.
Corporate and other- Mobile Services and Eliminations
Cost of revenues for retail mobile services includes the costs of provisioning mobile services, which is primarily our customers' voice, messaging, data usage provided by our MNO partner, and the costs of providing mobile phone hardware, which is the cost of mobile phone devices and SIM cards sold to our customers, order fulfillment related expenses, and inventory write-downs. Included in the costs of provisioning mobile services are any penalties associated with the minimum commitments with our MNO partner.
These mobile services costs also include the personnel and related costs of transitional services provided to EchoStar. These are billed monthly at set and established rates for services provided in period and include the provision of sales, marketing, order fulfillment, and data analytics related to the legacy customer base sold to EchoStar. The Company recognizes costs as the Company satisfies its obligations to provide professional services.
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Network Expenses
Network expenses include personnel and related expenses related to platform and network site reliability engineering, network operations centers, IT infrastructure and supply chain teams that support our various business segments. It also includes the depreciation and any impairment charges of property and equipment related to our networks and platforms, amortization of any intangible assets related to our networks and platforms, communication and productivity tool costs, and equipment maintenance costs. Communication and productivity tool costs include collaboration, customer support, bandwidth, co-location and provisioning costs we incur to support the supply of all our services across our segments.
The following table presents our cost of revenues, by revenue source:
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services$7,418 $6,478 $20,436 $21,021 
Construction revenue3,175 - 8,429 - 
Total Fiber10,593 6,478 28,865 21,021 
Wavelo:
Platform Services326 88 1,044 320 
Other professional services- - - - 
Total Wavelo326 88 1,044 320 
Tucows Domains
Wholesale
Domain Services38,906 41,793 116,472 123,368 
Value Added Services318 450 960 1,386 
Total Wholesale39,224 42,243 117,432 124,754 
Retail4,281 4,380 12,844 12,953 
Total Tucows Domains43,505 46,623 130,276 137,707 
Corporate and other*:
Mobile Services and eliminations$(223)4,641 9,172 13,012 
Network Expenses:
Network, other costs6,513 5,855 18,619 17,488 
Network, depreciation and amortization cost10,134 10,692 30,171 32,260 
Total Network Expenses16,647 16,547 48,790 49,748 
$70,848 $74,377 $218,147 $221,808 
Decrease$(3,530)$(3,661)
Decrease - percentage(5%)(2%)
*Corporate and other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.

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The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods presented:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Ting:
Fiber Internet Services11%9%9%9%
Construction services4%0%4%0%
Total Ting15%9%13%9%
Wavelo:
Platform Services0%0%0%0%
Other professional services0%0%0%0%
Total Wavelo0%0%0%0%
Tucows Domains:
Wholesale
Domain Services56%56%54%56%
Value Added Services0%1%0%1%
Total Wholesale56%57%54%57%
Retail6%6%6%6%
Total Tucows Domains62%63%60%63%
Corporate and other*:
Mobile services and eliminations0%6%4%6%
Network Expenses:
Network, other costs9%8%9%8%
Network, depreciation and amortization cost14%14%14%14%
23%22%23%22%
100%100%100%100%
*Corporate and other includes costs from Ting Mobile, corporate overhead functions, and other activities that do not meet the criteria for separate reportable segment disclosure under ASC 280. Ting Mobile is not managed as a separate reportable segment and is included within Corporate and other for purposes of segment reporting. Intersegment revenues and expenses are eliminated on consolidation.
Total cost of revenues for the three months ended September 30, 2026, decreased by $3.5 million or 5%, to $70.8 million from $74.4 million in the three months ended September 30, 2025. The three-month decrease in cost of revenues was driven by Mobile Service and eliminations, and Tucows Domains; partially offset by increases across Ting, Wavelo, and Network Expenses. The decrease in Mobile Services and eliminations of $4.9 million was due to the rerate credit related to the August MNO contract renewal, which stipulated that the MNO partner would credit the Company for any overcharges resulting from invoices issued at the previous rates from May to September 2026. The decrease in Tucows Domains of $3.1 million was primarily driven by a decline in domain names under management. The increase in Ting of $4.1 million is aligned with new costs associated with construction services, as well as growth in active subscribers. The increase in Wavelo of $0.2 million was primarily driven by the recognition of project costs related to bundled professional services. The increase in Network Expenses of $0.1 million was primarily driven by increased severance costs, offset by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses.
Total cost of revenues for the nine months ended September 30, 2026, decreased by $3.7 million or 2%, to $218.1 million from $221.8 million in the nine months ended September 30, 2025. The nine-month decrease in cost of revenues was driven by Tucows Domains, Mobile Service and eliminations, and Network Expenses, and partially offset by increases in Ting and Wavelo. The decrease in Tucows Domains of $7.4 million was primarily driven by a decline in domain names under management. The decrease in Mobile Services and eliminations of $3.8 million was primarily due to the lower MRR at our current subscriber count in the August MNO contract renewal. The lower MRR was retrospectively applied from May 2026 via the rerate credit recognized in Q3 2026. This was slightly offset by higher mobile telephony service costs due to plan mix changes impacting usage in the current period, as well as some bad debt costs related to long distance fraud charges. The decrease in Network Expenses of $1.0 million was primarily driven by a decrease in depreciation following sale of assets in the prior period, partially offset by increased severance costs. The increase in Ting of $7.8 million is aligned with new costs associated with construction services, as well as growth in active subscribers; offset by a one-time lease accounting adjustment in the prior period. The increase in Wavelo of $0.7 million was primarily driven by the recognition of project costs related to bundled professional services.
Deferred costs of fulfillment as of September 30, 2026, increased by $0.4 million to $113.4 million from $113.0 million at December 31, 2025. This was primarily driven by Tucows Domains due to the seasonal pattern of renewals being billed and deferred in the first half of the year, with the balance being drawn down and reaching its lowest balance towards the end of the year, resulting in a higher deferred costs of fulfillment balance at September 30, 2026 compared to December 31, 2025, despite the decline in domain names under management.

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Ting
During the three months ended September 30, 2026, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $4.1 million, or 64%, to $10.6 million as compared to the three months ended September 30, 2025. $3.2 million related to new costs associated with construction services, while $0.9 million is aligned with the subscriber and serviceable address growth across our Fiber network. Both these increases are consistent with the discussion in the Net Revenue section above.
During the nine months ended September 30, 2026, costs related to provisioning high speed Internet access for Ting and its subsidiaries - Cedar and Simply Bits, increased by $7.8 million, or 37%, to $28.9 million as compared to the nine months ended September 30, 2025. The prior period included a $3.0 million one-time Ting lease accounting adjustment to true up lease expense for three partner network leases, increasing costs. Normalizing for this impact in the current period results in an increase of $10.8 million, of which $8.4 million related to new costs associated with construction services, while $2.4 million is aligned with the subscriber and serviceable address growth across our Fiber network. Both these increases are consistent with the discussion in the Net Revenue section above.
Wavelo
Platform Services
Cost of revenues from Wavelo Platform Services for the three months ended September 30, 2026 increased by $0.2 million, or 270%, to $0.3 million as compared to the three months ended September 30, 2025. This was driven by the recognition of project costs related to providing bundled professional services to EchoStar. Although fewer bundled professional services hours were recognized to revenue in the three months ended September 30, 2026, project costs were higher, as the hours recognized in the three months ended September 30, 2025 were recognized on an expiry basis with no corresponding costs associated with providing services.
Cost of revenues from Wavelo Platform Services for the nine months ended September 30, 2026 increased by $0.7 million, or 226%, to $1.0 million as compared to the nine months ended September 30, 2025. This was driven by the recognition of project costs related to providing bundled professional services to EchoStar. Although fewer bundled professional services hours were recognized to revenue in the nine months ended September 30, 2026, project costs were higher, as the hours recognized in the nine months ended September 30, 2025 were recognized on an expiry basis with no corresponding costs associated with providing services.
Other Professional Services
Cost of revenues from Other Professional Services was nil for both the three months ended September 30, 2026 and September 30, 2025, as well as the nine months ended September 30, 2026 and for the nine months ended September 30, 2025. Costs of revenues to provide other professional services change depending on the nature and scope of work we are engaged to perform for our customers for select statements of work. These cost of revenues depend on the volume (if any) and scope of standalone technology services development work our customers engage us to perform. In the current period, we performed no standalone professional services for our customers. This is aligned to the net revenues from other professional services discussed above.
Tucows Domains
Wholesale - Domain Services
Costs for Wholesale domain services for the three months ended September 30, 2026, decreased by $2.9 million, or 7%, to $38.9 million, as compared to $41.8 million for the three months ended September 30, 2025. Decreases from Wholesale domain registrations were primarily driven by a decline in domain names under management since September 30, 2025 as some resellers migrated management of their domains in-house. The decrease is aligned to the decrease in Net Revenues discussed above.
Costs for Wholesale domain services for the nine months ended September 30, 2026, decreased by $6.9 million, or 6%, to $116.5 million, as compared to $123.4 million for the nine months ended September 30, 2025. Decreases from Wholesale domain registrations were primarily driven by a decline in domain names under management since September 30, 2025 as some resellers migrated management of their domains in-house. The decrease is aligned to the decrease in Net Revenues discussed above.
Wholesale - Value-Added Services
Costs for wholesale value-added services for the three months ended September 30, 2026, decreased by $0.1 million, or 29%, to $0.3 million, as compared to $0.5 million for the three months ended September 30, 2025. This was driven by storefront costs reclassified from value-added services to wholesale, as well as lower certificate costs, in line with lower certificate revenues.
Costs for wholesale value-added services for the nine months ended September 30, 2026, decreased by $0.4 million, or 31%, to $1.0 million, as compared to $1.4 million for the nine months ended September 30, 2025. This was driven by storefront costs reclassified from value-added services to wholesale, as well as lower certificate costs, in line with lower certificate revenues.
Retail
Costs for retail domain services for the three months ended September 30, 2026, decreased by $0.1 million, or 2%, to $4.3 million, as compared to $4.4 million for the three months ended September 30, 2025. This was driven by lower legacy Enom retail names, in line with revenue discussion above.
Costs for retail domain services for the nine months ended September 30, 2026, decreased by $0.1 million, or 1%, to $12.8 million, as compared to $13.0 million for the nine months ended September 30, 2025. This was driven by lower legacy Enom retail names, in line with revenue discussion above.
Corporate and other - Mobile Services and Eliminations
Cost of revenues from Mobile Services and Eliminations for the three months ended September 30, 2026, decreased by $4.9 million or 105%, to $0.2 million as compared to the three months ended September 30, 2025. The decrease is primarily driven by the $4.3 million rerate credit related to the August MNO contract renewal, which stipulated that the MNO partner would credit the Company for any overcharges resulting from invoices issued at the previous rates from May to September 2026. This was furthered by a $0.3 million credit received related to the usage costs associated with long-distance charges from an isolated instance of unauthorized traffic. The Company accrued no minimum penalties associated with the MNO minimum commitment shortfall in the three months ended September 30,
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2026, as compared to $1.3 million in the three months ended September 30, 2025. The company incurred penalties through January 2026, at which point the initial term of the contract was complete. The contract automatically continued month-to-month thereafter, until the renewal in August 2026.
Cost of revenues from Mobile Services and Eliminations for the nine months ended September 30, 2026, decreased by $3.8 million or 30%, to $9.2 million as compared to the nine months ended September 30, 2025. The decrease was primarily due to the lower MRR at our current subscriber count in the August MNO contract renewal. The lower MRR was retrospectively applied from May 2026 via the rerate credit recognized in Q3 2026. This was slightly offset by increased costs associated with mobile telephony services from the small group of customers retained by the Company as part of the EchoStar Purchase Agreement, and less so from any transition services related costs. This increase is driven by subscriber growth with new subscribers joining on unlimited plans with higher data usage profiles. Some of the cost increase period-over-period is also a result of bad debt costs associated with long-distance charges from an isolated instance of unauthorized traffic. The Company accrued $0.2 million in penalties associated with the MNO minimum commitment shortfall in the nine months ended September 30, 2026, as compared to $3.5 million in the nine months ended September 30, 2025. The company incurred penalties through January 2026, at which point the initial term of the contract was complete. The contract automatically continued month-to-month thereafter, until the renewal in August 2026.
Network Expenses
Network expenses for the three months ended September 30, 2026, increased by $0.1 million or 1%, to $16.6 million, as compared to $16.5 million for the three months ended September 30, 2025. The increase was primarily driven by increased severance costs, offset by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses.
Network expenses for the nine months ended September 30, 2026, decreased by $1.0 million or 2%, to $48.8 million, as compared to $49.7 million for the nine months ended September 30, 2025. This was primarily driven by a decrease in depreciation following sale of assets in the prior period, slightly offset by incremental depreciation from continued development of Wavelo capitalized platform assets, as well as increased severance costs.
SALES AND MARKETING
Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related expenses of our sales, product management, public relations, call center, support and marketing personnel. Other sales and marketing expenses include customer acquisition costs, advertising and other promotional costs.
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Sales and marketing$11,701 $11,882 $36,358 $34,818 
Increase (decrease) over prior period$(181)$1,540 
Increase (decrease) - percentage(2)%4 %
Percentage of net revenues12%12%12%12%
Sales and marketing expenses for the three months ended September 30, 2026, decreased by $0.2 million, or 2%, to $11.7 million as compared to the three months ended September 30, 2025. The decrease was primarily driven by a decrease in Wavelo bonus as costs are trued up to actual scorecard performance. This was partially offset by marketing and contracted labor spending as Ting ramps up marketing and customer acquisition efforts.
Sales and marketing expenses for the nine months ended September 30, 2026, increased by $1.5 million, or 4%, to $36.4 million as compared to the nine months ended September 30, 2025. The increase was primarily driven by marketing, contracted labor, and commissions spending as Ting ramps up marketing and customer acquisition efforts. This was furthered by a slight increase in contracted labor spend as Wavelo looks to grow its pipeline and team in support of top line growth.
TECHNICAL OPERATIONS AND DEVELOPMENT
Technical operations and development expenses consist primarily of personnel costs and related expenses required to support the development of new or enhanced service offerings and the maintenance and upgrading of existing infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register domain names, provide Wavelo's platform services, provide Ting's Internet Services, email, retail, domain portfolio and other Internet services. All technical operations and development costs are expensed as incurred.
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Technical operations and development$4,816 $4,682 $14,108 $13,433 
Increase (decrease) over prior period$134 $675 
Increase (decrease) - percentage3%5 %
Percentage of net revenues5%5%5%5%
Technical operations and development expenses for the three months ended September 30, 2026, increased by $0.1 million, or 3%, to $4.8 million when compared to the three months ended September 30, 2025. The increase was primarily driven by Tucows Domains severance costs, slightly furthered by increased AI token costs. This was offset by decreases in payroll costs in Wavelo and Ting, reflective of a shift towards a smaller workforce, as well as increased capitalized labor in Tucows Domains.
Technical operations and development expenses for the nine months ended September 30, 2026, increased by $0.7 million, or 5%, to $14.1 million when compared to the nine months ended September 30, 2025. The increase was primarily driven by Tucows Domains severance costs, furthered by increased AI token costs and lower capitalized labor in Wavelo. This was offset by decreases in payroll costs in Wavelo and Ting, reflective of a shift towards a smaller workforce, as well as increased capitalized labor in Tucows Domains.
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GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for managerial and administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general corporate expenses.
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
General and administrative$11,538 $9,650 $34,462 $28,552 
Increase (decrease) over prior period$1,887 $5,909 
Increase (decrease) - percentage20 %21 %
Percentage of net revenues12%10%12%10%
General and administrative expenses for the three months ended September 30, 2026, increased by $1.9 million, or 20%, to $11.5 million as compared to the three months ended September 30, 2025. The increase was primarily driven by increased professional fees across the segments, as well as increased severance costs. Slightly offset by decreased facilities costs as a portion of Ting rent was reclassified to Other Expenses, to correspond with the related sublease income recorded to Other Income.
General and administrative expenses for the nine months ended September 30, 2026, increased by $5.9 million, or 21%, to $34.5 million as compared to the nine months ended September 30, 2025. The increase was primarily driven by increased professional fees across the segments, as well as increased severance costs and unrealized loss on foreign exchange. Slightly offset by decreased facilities costs as a portion of Ting rent was reclassified to Other Expenses, to correspond with the related sublease income recorded to Other Income.
IMPAIRMENT OF PROPERTY AND EQUIPMENT
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Impairment of property and equipment$— $10,724 $— $10,724 
Increase (decrease) over prior period$(10,724)$(10,724)
Increase (decrease) - percentage(100)%(100)%
Percentage of net revenues0%11%0%4%
During the three months and nine months ended September 30, 2025, the Company recorded an impairment loss of $10.7 million primarily related to abandoned materials and supplies held for capital projects, as well as impairment of right-of-use operating lease assets. No such impairment was recorded in the three months ended September 30, 2026.

DEPRECIATION OF PROPERTY AND EQUIPMENT
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Depreciation of property and equipment$443 $78 $1,350 $241 
Increase (decrease) over prior period$365 $1,109 
Increase (decrease) - percentage466 %461 %
Percentage of net revenues0%0%0%0%
Depreciation costs for the three months ended September 30, 2026, increased by $0.4 million, or 466%, to $0.4 million as compared to the three months ended September 30, 2025. The increase was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses for more relevant presentation. The majority of this increase relates to the Ting segment.
Depreciation costs for the nine months ended September 30, 2026, increased by $1.1 million, or 461%, to $1.3 million as compared to the nine months ended September 30, 2025. The increase was primarily driven by depreciation of all non-network assets, some of which were previously depreciated in network depreciation, being reclassified to operating expenses for more relevant presentation. The majority of this increase relates to the Ting segment.
AMORTIZATION OF INTANGIBLE ASSETS
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Amortization of intangible assets$331 $707 $1,402 $2,296 
Increase (decrease) over prior period$(376)$(894)
Increase (decrease) - percentage(53)%(39)%
Percentage of net revenues0%1%0%1%
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Amortization of intangible assets for the three months ended September 30, 2026, decreased by $0.4 million, or 53%, to $0.3 million as compared to the three months ended September 30, 2025. The decrease was driven by the completed amortization of Ascio brand assets, which was completed in March 2026.
Amortization of intangible assets for the nine months ended September 30, 2026, decreased by $0.9 million, or 39%, to $1.4 million as compared to the nine months ended September 30, 2025. The decrease was driven by the completed amortization of Ascio brand assets , which was completed in March 2026.



LOSS (GAIN) ON DISPOSITION OF PROPERTY AND EQUIPMENT

(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
(Gain) loss on disposition of property and equipment$(1)$(3,965)$827 $(5,753)
Increase (decrease) over prior period$3,964 $6,580 
Increase (decrease) - percentage(100%)(114%)
Percentage of net revenues0%(4%)0 %(2%)

In the three months ended September 30, 2026, the Company recorded minimal gains on disposition (less than $0.1 million). In the three months ended September 30, 2025, the Company recorded a gain on disposition of property and equipment of $4.0 million, primarily related to the disposition of Ting inventory held for capital projects.
In the nine months ended September 30, 2026, the Company recorded a loss on disposition of property and equipment of $0.8 million, primarily related to the disposition of Ting contract assets and inventory held for capital projects. In the nine months ended September 30, 2025, the Company recorded a gain on disposition of property and equipment of $5.8 million, primarily related to the disposition of Ting inventory held for capital projects.

OTHER INCOME (EXPENSES)

(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Other income (expense), net$(8,583)$(10,986)$(31,876)$(32,413)
Increase (decrease) over prior period$2,403 $537 
Increase (decrease) - percentage(22%)(2%)
Percentage of net revenues(9%)(11%)(11)%(11%)

Other income (expenses) during the three months ended September 30, 2026, increased by $2.4 million when compared to the three months ended September 30, 2025. The increase in other income (expense) was driven by lower interest expense, offset by lower income earned on sale of Transferred Assets to EchoStar and lower other income. Net interest expense associated with Generate's redeemable preferred units decreased by $3.2 million as there were fewer months of interest expense incurred following the acquisition of the preferred shares in July 2026. Income earned on sale of Transferred Assets to EchoStar decreased by $0.6 million from normal churn, as expected. Other income decreased by $0.2 million driven by the reclassification of rent expense from General and Administrative expenses, to correspond with income from Ting subleases recorded to Other Income.
Other income (expenses) during the nine months ended September 30, 2026, increased by $0.5 million when compared to the nine months ended September 30, 2025. The increase in other income (expense) was driven by lower interest expense, offset by lower income earned on sale of Transferred Assets to EchoStar and lower other income. Net interest expense decreased by $2.1 million, driven by a $2.0 million decrease associated with Generate's redeemable preferred units as there were fewer months of interest expense incurred following the acquisition of the preferred shares in July 2026, and a $1.2 million decrease in interest expense related to the Credit Facility for the Tucows businesses excluding Ting due to the reduction in outstanding principal balance; offset by a $0.7 million increase due to reduced money market fund interest income from lower rates, and a $0.3 million increase due to lower interest expense capitalization associated with Fiber network assets under construction. Income earned on sale of Transferred Assets to EchoStar decreased by $1.5 million from normal churn, as expected. Other income decreased by $0.1 million driven by the reclassification of 4 months of rent expense from General and Administrative expenses, to correspond with income from Ting subleases recorded to Other Income.

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INCOME TAXES
(Dollar amounts in thousands of U.S. dollars)For the Three Months Ended September 30,For the Nine Months Ended September 30,
2026202520262025
Provision for income taxes$1,988 $2,456 $7,510 $6,887 
Increase (decrease) over prior year$(468)$623 
Effective tax rate
*not meaningful		(24)%(12)%(18)%(15)%

Income tax expense for the three and nine months ended September 30, 2026, decreased by $0.5 million and increased by $0.6 million, respectively, when compared to the three and nine months ended September 30, 2025. The change in the effective tax rate is primarily due to the impact of foreign operations.

We regularly evaluate our deferred tax assets, including net operating losses, to determine whether a valuation allowance is necessary based on our expectations of future taxable income. The increase in our valuation allowance on net operating losses reflects our assessment of the likelihood of realizing future tax benefits associated with these losses.
ADJUSTED EBITDA
We believe that the provision of this non-GAAP measure allows investors to evaluate the operational and financial performance of our core business using similar evaluation measures to those used by management. We use Adjusted EBITDA to measure our performance and prepare our budgets. Since Adjusted EBITDA is a non-GAAP financial performance measure, our calculation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Because Adjusted EBITDA is calculated before certain recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a liquidity measure. For liquidity measures, see the Condensed Consolidated Statements of Cash Flows included in Part I of this Quarterly Report. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ from period to period. We endeavor to compensate for these limitations by providing the relevant disclosure of the items excluded in the calculation of Adjusted EBITDA to net loss based on GAAP, which should be considered when evaluating the Company's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.
Our Adjusted EBITDA definition excludes provision for income tax, depreciation, amortization of intangible assets, asset impairment and loss (gain) on disposition of property and equipment, interest expense (net), stock-based compensation, gains and losses from unrealized foreign currency transactions and costs that are one-time in nature and not indicative of on-going performance (profitability), including acquisition and transition costs. Gains and losses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding foreign currency contracts not designated in accounting hedges, as well as the unrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.
The following table reconciles net loss to adjusted EBITDA:
Reconciliation of Net loss to Adjusted EBITDAThree Months Ended September 30,Nine Months Ended September 30,
(In Thousands of U.S. Dollars)2026202520262025
Net Loss for the period$(10,273)$(23,019)$(48,851)$(53,789)
Less:
Provision for income taxes1,988 2,456 7,510 6,887 
Depreciation of property and equipment10,212 10,405 30,425 31,404 
Impairment and loss (gain) on disposition of property and equipment(1)6,920 1,441 5,771 
Amortization of intangible assets696 1,072 2,497 3,393 
Interest expense, net10,689 13,901 39,004 41,135 
Stock-based compensation962 1,387 3,220 4,278 
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities(189)(164)32 (601)
Acquisition, transaction and transition costs (1)
4,470 311 7,240 1,039 
Adjusted EBITDA$18,554 $13,269 $42,518 $39,517 
1Acquisition and other costs represent transaction-related expenses, transitional expenses, such as redundant post-acquisition expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.
Adjusted EBITDA increased by $5.3 million, or 40%, to $18.6 million for the three months ended September 30, 2026, when compared to the three months ended September 30, 2025. The increase in Adjusted EBITDA was primarily driven by increases across Corporate and other - Mobile Services and eliminations, Ting, and Wavelo. The increase in Corporate and other - Mobile Services and eliminations contribution of $3.6 million was primarily driven by the decrease in cost of revenues related to the rerate credit from the August MNO contract renewal, slightly offset by increased severance, legal, and professional fees. Ting contribution increased by $2.4 million, primarily driven by new construction revenue and continued subscriber growth across the markets we serve. Wavelo contribution increased by $0.3 million, driven by savings across operating expenses, slightly offset by a decrease in revenue driven by fewer subscribers under management. These increases in Adjusted EBITDA were partially offset by a $1.0 million decrease in Tucows Domains contribution, primarily driven by severance costs incurred in the current period, as well as a decrease in revenue due to declining domains under management and expiry auction revenue.
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Adjusted EBITDA increased by $3.0 million, or 8%, to $42.5 million for the nine months ended September 30, 2026, when compared to the nine months ended September 30, 2025. The increase in Adjusted EBITDA was driven by $8.0 million increase in Ting, primarily driven by new construction revenue and continued subscriber growth across the markets we serve. This increase in Adjusted EBITDA was partially offset by decreases across Wavelo, Tucows Domains, and Corporate and other - Mobile Services and eliminations. Wavelo's contribution decreased by $3.1 million, driven by less bundled professional services revenues and higher costs, and higher operating costs in service of growth and go-to market activities. Tucows Domains contribution decreased by $1.6 million primarily driven by severance costs incurred in the current period. The decrease in Corporate and other - Mobile Services and eliminations contribution of $0.3 million was primarily driven by the expected decrease in Mobile income earned on sale of Transferred Assets to EchoStar, and increased corporate operating expenses, including legal, professional fees, and severance costs; offset by the decrease in cost of revenues related to the new MRR and to the rerate credit from the August MNO contract renewal.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2026, our cash and cash equivalents balance decreased by $22.0 million, our funds held by trustee balance decreased by $0.2 million, and our secured notes reserve funds balance decreased by $1.1 million when compared to December 31, 2025. The decrease in our cash balance was driven primarily by $15.7 million for additions to property and equipment, $6.0 million repayment of syndicated revolver, $3.0 million for the redemption of preferred shares, $0.9 million related to acquisition of intangible assets, and $0.7 million for syndicated revolver costs. These decreases were offset by $2.4 million in proceeds on disposal of property and equipment by Ting, and $0.8 million from cash earned from operating activities.
Ting Securitized Financing Facility

On August 20, 2024, the Company through its wholly owned subsidiaries, including Ting, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitized transaction. On the closing date, Ting issued (i) the 2024 Class A-2 Notes, (ii) the 2024 Class B Notes and (iii) the 2024 Class C Notes.

The offering was exempt from registration under the Securities Act. Subject to certain limitations, the 2024 Notes are secured by certain of the Company's revenue-generating assets, consisting principally of the Securitized Assets, that are owned by certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company (collectively, the "Securitization Entities") that act as guarantors under the Base Indenture.

The 2024 Term Notes were issued under the Base indenture, dated as of May 4, 2023 (as supplemented by the Base Indentures Supplement No. 1, dated as of November 10, 2023), by and between the Issuer, the asset parties party thereto and Citibank, N.A., as trustee (in such capacity, the "Indenture Trustee") and securities intermediary and a series supplement to the Base Indenture dated as of the Closing Date (the "Series 2024-1 Supplement"), by and among the Issuer, the asset parties party thereto and the Indenture Trustee. The Base Indenture and the Series 2024-1 Supplement will allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein.

Interest payments on the 2024 Term Notes are payable on a monthly basis. The legal final maturity date of the 2024 Term Notes is in August of 2054, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2024 Term Notes will be in August 2029. If the Issuer has not repaid or refinanced the 2024 Term Notes prior to the anticipated repayment date, additional interest will accrue on the 2024 Term Notes in an amount equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of the following exceeds the original interest rate of such 2024 Term Note (i) the yield to maturity (adjusted to a "mortgage equivalent basis" pursuant to the standards and practices of the Securities Industry and Financial Markets Association) on such anticipated repayment date of the United States Treasury Security having a term closest to 10 years, plus (ii) 5.00%, plus (iii) (x) for the 2024 Class A-2 Notes, 2.00%, (y) for the 2024 Class B Notes, 3.25% and (z) for the 2024 Class C Notes, 7.00%. Please see the discussion in the Material Cash Requirements section below.

2023 Credit Facility
On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto (the “Lenders”), to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”). The Borrowers may request an increase to the Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00. In connection with the 2023 Credit Facility, the Company incurred $0.9 million of fees paid to the Lenders and $0.3 million of legal fees related to the debt issuance. These fees were reflected as a reduction to the carrying amount of the loan payable and were fully amortized over the term of the 2023 Credit Agreement.
On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extended the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remained unchanged; however, the Extension Agreement amended certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees were reflected as reduction to the carrying amount of the loan payable and are being amortized over the extended term from September 2026 to September 2027.
On July 27, 2026, the Company entered into the Third Amendment. The Third Amendment extends the maturity date of the 2023 Credit Facility from September 22, 2027 to July 27, 2029, except with respect to the commitment of one syndicate member in the amount of $27.5 million, which continues to mature on September 22, 2027 unless assigned to a replacement lender. The Company has commenced discussions to replace this lender with an existing or new syndicate member. The outstanding balance attributable to this lender’s commitment is classified as a current liability, as its maturity now falls within twelve months of the balance sheet date. The Company is required to maintain a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75:1.00 and an Interest Coverage Ratio of not less than 3.00:1.00. The Third Amendment amends the negative covenants to permit the Company to make investments in the Ting business, subject to specified conditions and the existing financial covenants.
During the three and nine months ended September 30, 2026, the Company made repayments of $6.0 million. During the three and nine months ended September 30, 2025, the Company made repayments of $2.5 million and $5.0 million, respectively, on the 2023 Credit Facility. The Company ended September 30, 2026 with a remaining principal balance of $184.4 million, of which $21.1 million will be due in 2027 and $163.3 million will be due in 2029.
As of September 30, 2026, the Company held contracts in the amount of $9.4 million with BMO to trade U.S. dollars in exchange for Canadian dollars under an uncommitted treasury risk management facility which assists the Company with hedging Canadian dollar exposures. Please see the discussion in the Material Cash
Requirements section below.

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Cash Flow from Operating Activities

Net cash inflows from operating activities during the nine months ended September 30, 2026 totaled $0.8 million, compared to a net cash outflow of $3.2 million in the nine months ended September 30, 2025.

Net loss during the nine months ended September 30, 2026 was $48.9 million, which included non-cash charges of $53.1 million such as depreciation, impairment of property and equipment, accretion of redeemable preferred shares, loss (gain) on disposal of assets, stock-based compensation, amortization of debt discount and issuance costs, amortization of intangible assets, and deferred income taxes (recovery). This was furthered by changes in our working capital, which resulted in a net cash outflow of $3.4 million from cash utilization of $12.2 million driven by accounts receivable, deferred costs of fulfillment, inventory, income taxes recoverable, contract asset, accreditation fees payable, and net right of use operating assets. This was offset by positive contributions of $8.8 million driven by prepaid expenses and deposits, other liabilities, customer deposits, disposal of domain names, and undistributed earnings of equity method investee.
Cash Flow from Financing Activities

Net cash outflows from financing activities during the nine months ended September 30, 2026 was $9.8 million, compared to a net cash outflow of $5.4 million in the nine months ended September 30, 2025. $6.0 million related to repayment of the syndicated revolver, $3.0 million related to redemption of Generate preferred shares, $0.7 million for costs associated with the amendment of the syndicated revolver, and $0.1 million related to payment towards the repurchase of shares.

Cash Flow from Investing Activities

Net cash outflows from investing activities during the nine months ended September 30, 2026 totaled $14.4 million, compared to a net cash inflow of $6.1 million in the nine months ended September 30, 2025. Cash outflows totaled $16.8 million, with $15.7 million related to property and equipment additions (of which $9.1 million related to Ting, $3.3 million related to Wavelo, and $3.3 million related to Tucows Domains and Corporate), $0.9 million related to acquisition of intangible assets in Tucows Domains, and $0.2 million for the acquisition of equity interest in partnership. These cash outflows were partially offset by $2.4 million cash inflow related to proceeds on disposal of Ting property and equipment.

Material Cash Requirements

As of September 30, 2026, the Company's Cash and cash equivalents, restricted cash and secured notes reserve funds balances totaled $41.0 million, of which $29.8 million belonged to Ting Internet and $11.2 million belonged to the other Tucows' segments.

In our 2025 Annual Report, we disclosed our material cash requirements of both the Ting segment as well as the other segments excluding Ting. As of September 30, 2026, other than the items mentioned below, there have been no other material changes to our material cash requirements outside the ordinary course of business.

Ting

As of September 30, 2026, the balance owing on the Unit Purchase Agreement was nil, following the Unit Purchase and Exit Agreement, resulting in the restructuring of the debt ("Note 19. Redeemable preferred units" of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this report).
On December 1, 2025, Ting received written notice from Generate asserting that a Return Breach and a Trigger Event had occurred as a result of Ting’s failure to pay the quarterly preferred return for two consecutive quarters, and Generate reserved its rights to pursue certain remedies as described in “Note 19. Redeemable preferred units” to the Condensed Consolidated Financial Statements. On July 27, 2026, Tucows acquired all of the outstanding Series A Preferred Units from Generate for $3.0 million in cash, and the units were surrendered, cancelled and retired. In connection with the Exit Agreement, Generate waived all rights associated with the units, including its redemption rights, and withdrew its notice of Return Breach and Trigger Event. As a result, no preferred return accrues or is payable after July 27, 2026, no redeemable preferred units were outstanding as of September 30, 2026, and Ting is no longer subject to the redemption exposure previously described. Please see “Note 19. Redeemable Preferred Units” of the Notes to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report for further information, including the Company's remaining contingent payment obligations in connection with the Exit Agreement.
In connection with the Exit Agreement, the Company provided Ting with a $5.0 million intercompany term loan, and Ting sold its data center to the Company for $6.0 million in cash. In addition, the Company is required to make a $12.5 million investment in Ting within twelve months of closing; if it does not, the Company must pay Generate $5.0 million. Ting’s Term Notes have no recourse to the Company, and the Company’s direct financial exposure to Ting is limited to the intercompany loan, which eliminates on consolidation, and certain contractual guarantees. See “Note 2. Basis of Presentation”, “Note 19. Redeemable Preferred Units” and “Note 20. Commitments and Contingencies” of the Notes to the Condensed Consolidated Financial Statements included in Part I, of this report.
Ting incurred a net loss of $15.1 million and $26.7 million for the three months ended September 30, 2026 and September 30, 2025, respectively. As of September 30, 2026, Ting had $13.6 million in unrestricted cash and cash equivalents, $2.7 million in accounts receivable, $1.3 million in accounts payable, and $7.7 million in accrued liabilities. Comparatively, as of December 31, 2025, Ting had $23.8 million in unrestricted cash and cash equivalents, $3.6 million in accounts receivable, $1.2 million in accounts payable, and $8.7 million in accrued liabilities. At September 30, 2026, Ting’s long-term liabilities included $294.6 million payable on the 2023 and 2024 Term Notes. Ting incurred an operating cash flow deficit of $7.9 million and $7.0 million for the three months ended September 30, 2026 and September 30, 2025, respectively. Ting has scheduled interest payments of $20.1 million in the twelve months following September 30, 2026.
Tucows Businesses Excluding Ting
Tucows businesses excluding Ting, acquisitions and capital investments have been funded by the Company's operating income and the Company's existing 2023 Credit Agreement. As of September 30, 2026, the Company’s 2023 Credit Facility had an outstanding balance of $184.4 million. Tucows businesses excluding Ting make principal repayments from time to time.
On July 27, 2026, in connection with the Exit Agreement, the Company entered into a Third Amendment to the 2023 Credit Agreement, which (i) extended the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amend the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants. Key financial covenants remained substantially the same, including a Total Funded Debt to Adjusted EBITDA ratio of no greater than 3.75x and an interest coverage ratio of not less than 3.0:1.00x.
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For Fiscal 2026, the Company plans to fund the cash requirements of Tucows businesses excluding Ting solely through operating income, while making discretionary loan repayments to create greater operating flexibility and access to additional financing.
In the long-term, Tucows businesses excluding Ting may seek additional financing to accelerate the growth of our business, repurchase shares or fund future acquisitions. The Company's 2023 Credit Facility, which was most recently amended to (i) extend the maturity date of the facility from September 22, 2027 to July 27, 2029 (with the exception of one syndicate member holding a $27.5 million commitment, which the Company has commenced discussions to replace with an existing or new syndicate member), and (ii) amended the negative covenants to permit the Company to invest in the Ting business, subject to specified conditions and the existing financial covenants, provides committed liquidity to the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We develop products in Canada and sell these services in North America and Europe. Our sales are primarily made in U.S. dollars, while a major portion of expenses are incurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Our interest income is sensitive to changes in the general level of Canadian and U.S. interest rates, particularly since the majority of our investments are in short-term instruments. Based on the nature of our short-term investments, we have concluded that there is no material interest rate risk exposure as of September 30, 2026.
We are also subject to market risk exposure related to changes in interest rates under our 2023 Credit Agreement. Changes in interest rates will impact our borrowing cost. However, fluctuations in interest rates are beyond our control. We will continue to monitor and assess the risks associated with interest expense exposure and may act in the future to mitigate these risks.
Although our functional currency is the U.S. dollar, a substantial portion of our fixed expenses are incurred in Canadian dollars. Our policy with respect to foreign currency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreign currency exchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchange rate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange forward contracts to mitigate the exchange rate risk on portions of our Canadian dollar exposure.
As of September 30, 2026, we had the following outstanding foreign exchange forward contracts to trade U.S. dollars in exchange for Canada dollars:
Maturity date (Dollar amounts in thousands of U.S. dollars)Notional amount of U.S. dollarsWeighted average exchange rate of U.S.
dollars		Fair value Asset (Liability)
October - December 20269,372 1.4021 (95)
$9,372 1.4021 $(95)
As of September 30, 2026, the Company had $9.4 million of outstanding foreign exchange forward contracts which will convert to CDN $13.1 million. Of these contracts, $9.4 million met the requirements for hedge accounting.
As of December 31, 2025, the Company had $27.2 million of outstanding foreign exchange forward contracts which would convert to CDN $37.0 million. Of these contracts, $27.2 million met the requirements for hedge accounting.
The $17.8 million decrease in outstanding foreign exchange forward contracts since December 31, 2025 is due to the fact that those contracts were window forwards covering 2026 Canadian dollar costs, which were drawn down through the year as the costs were paid. The remaining $9.4 million balance at September 30, 2026 are all maturing by December 31, 2026. No new forward contracts for 2027 costs were traded during 2026, so no new contracts replaced the settled contracts.
Our 2027 Canadian dollar costs were unhedged at September 30, 2026 and the remaining forwards only covered up to December 31, 2026. Subsequent to September 30, 2026, we booked new forward contracts covering up to June 30, 2027.
We have performed a sensitivity analysis model for foreign exchange exposure over the nine months ended September 30, 2026. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the nine months ended September 30, 2026. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in an increase in net loss for the nine months ended September 30, 2026 of approximately $4.3 million, before the effects of hedging. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks.
Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange contracts, commercial papers and accounts receivable. Our cash, cash equivalents and short-term investments are in high-quality securities placed with major banks and financial institutions whom we have evaluated as highly creditworthy. Similarly, we enter into our foreign exchange contracts with major banks and financial institutions. With respect to accounts receivable, we perform ongoing evaluations of our customers, generally granting uncollateralized credit terms to our customers, and maintaining an allowance for expected credit losses based on historical experience and our expectation of future losses.
Interest rate risk
Our exposure to interest rate fluctuations relate primarily to our 2023 Credit Agreement.
As of September 30, 2026, we had an outstanding balance of $184.4 million on the 2023 Credit Facility. The 2023 Credit Agreement added SOFR Loans as a form of advance available under the 2023 Credit Facility to replace LIBOR Rate Advances, and such SOFR Loans may bear interest based on Adjusted Daily Simple SOFR (defined to be the applicable SOFR rate published by the Federal Reserve Bank of New York plus 0.10% per annum subject to a floor of zero) or Adjusted Term SOFR (defined to be the applicable SOFR rate published by CME Group Benchmark Administration Limited plus 0.10% for one-month, 0.15% for three-months, and
52
Table of Contents
0.25% for six-months per annum). As of September 30, 2026, an adverse change of one percent on the interest rate would have the effect of increasing our annual interest payments under the 2023 Credit Agreement by approximately $1.8 million, assuming that the loan balance as of September 30, 2026 is outstanding for the entire period.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on the evaluation as of September 30, 2026 management has concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
(b)Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2026, there have not been any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
53
Table of Contents
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, individually or in the aggregate, we believe will materially harm our business. We cannot assure that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of our attention.
In addition, pursuant to Item 103(c)(3)(iii) of Regulation S-K under the Exchange Act, the Company is required to disclose certain information about environmental proceedings to which governmental authority is a party if the Company reasonably believes such proceedings may result in monetary sanctions, exclusive of interest and costs, at or above a stated threshold. The Company has elected to apply a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.
Item 1A. Risk Factors
Certain factors may have a material adverse effect on our business, financial condition and results of operations. You should carefully consider the risks and uncertainties referenced below, together with all of the other information in this Quarterly Report on Form 10-Q, including our Condensed Consolidated Financial Statements and related notes. Any of those risks could materially and adversely affect our business, operating results, financial condition, or prospects and cause the value of our common stock to decline, which could cause you to lose all or part of your investment.
There have been no material changes to the Risk Factors described under "Part I - Item 1A. Risk Factors" in our Annual Report on Form 10-K for Fiscal 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On February 12, 2026, the Company announced that its Board of Directors (“Board”) approved a stock buyback program to repurchase up to $40 million of its common stock in the open market (the “2026 Buyback Program”). The 2026 Buyback Program commenced on February 13, 2026 and is expected to terminate on February 12, 2027. For the three and nine months ended September 30, 2026, the Company did not repurchase any shares under the 2025 and 2026 Buyback Programs.
We have not declared or paid cash dividends on our common stock during the nine months ended September 30, 2026, and we do not intend to do so in the immediate future but we may decide to do so in the future depending on ongoing market conditions. Our ability to pay any cash dividends on our common stock, should our Board decide to do so, is also dependent on our earnings and cash requirements and may, from time to time, be governed by the terms of our credit agreements.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)None.
(b)None.
(c)During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (a “Rule 10b5-1 trading arrangement”) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
54
Table of Contents
Item 6. Exhibits
No.Description
3.1.1
3.1.2
3.2.1
3.2.2
10.1#
10.2#
31.1#
31.2#
32.1†
32.2†
101.INS#Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH#Inline XBRL Taxonomy Extension Schema Document
101.CAL#Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF#Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB#Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE#Inline XBRL Taxonomy Extension Presentation Linkbase Document
104#Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
#Filed herewith.
†Furnished herewith.
*Certain schedules and similar attachments have been omitted in reliance on Item 601 (a)(5) of Regulation S-K. The Company will provide, on supplemental basis, a copy of any omitted schedule or attachment to the Securities and Exchange Commission or its staff upon request.
55
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 5, 2026TUCOWS INC.
By:/s/ DAVID WOROCH
David Woroch
President and Chief Executive Officer
By:/s/ IVAN IVANOV
Ivan Ivanov
Chief Financial Officer
(Principal Financial and Accounting Officer)
56
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS
PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE
OMISSIONS HAVE BEEN MADE.
Exhibit 10.1
Execution Version
THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) dated as of
the 27th day of July, 2026.
BETWEEN:
BANK OF MONTREAL, as Administrative Agent and Sole
Bookrunner
(herein called the “Agent”)
- and -
THE LENDERS FROM TIME TO TIME PARTY HERETO, as
Lenders
(herein called the “Lenders”)
- and -
TUCOWS.COM CO., as Canadian Borrower
and
TUCOWS(DELAWARE)INC.,TINGINC.,TUCOWS
(EMERALD), LLC, WAVELO, INC. and TUCOWS Inc., as U.S.
Borrowers
(herein called the “Borrowers”)
- and –
THEGUARANTORSFROMTIMETOTIMEIDENTIFIED
HEREIN, as Guarantors
(herein called the “Guarantors”)
WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into a
credit agreement made as of September 22, 2023, as amended by a first amendment to credit
agreement dated May 3, 2024 and a second amendment to credit agreement dated September
8, 2025 (as further amended, restated, renewed, extended, supplemented, replaced or
otherwise modified to the date hereof, the “Credit Agreement”);
AND WHEREAS the Borrowers have advised the Agent that Ting Inc. intends to resolve
or culminate its business under the Verizon Agreement via renegotiation, transfer or termination
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS
PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE
OMISSIONS HAVE BEEN MADE.
of the Verizon Agreement, which is a Material Contract under the Credit Agreement (the
“Verizon Agreement Resolution”);
- 2 -
AND WHEREAS pursuant to Section 18.01(1) of the Credit Agreement, the Majority
Lenders may waive the application of Section 9.01(12) of the Credit Agreement to the Verizon
Agreement Resolution to the extent such application arises;
AND WHEREAS the Agent has become aware that Tucows, Inc. delivered an
unsecured corporate guarantee of Ting Fiber, LLC’s obligations to Colorado Springs Utilities
under the dark fiber network lease agreement dated December 17, 2021 pursuant to a parent
guaranty dated December 17, 2021 (the “CSU Guarantee”);
AND WHEREAS the CSU Guarantee was entered into prior to the execution of the
Credit Agreement in the ordinary course of business pursuant to Section 8.02(5)(iii) of the Credit
Agreement and was publicly disclosed prior to the execution of the Credit Agreement via various
press releases and SEC filings;
AND WHEREAS the Majority Lenders contend that CSU Guarantee may not have been
properly disclosed to the Agent in connection with the Credit Agreement and potentially
constitutes a breach of Section 8.02(5) of the Credit Agreement (the “CSU Guarantee
Disclosure”);
AND WHEREAS notwithstanding the public disclosure of the CSU Guarantee prior to
the execution of the Credit Agreement, the Majority Lenders agree to waive any potential breach
of Section 8.02(5) solely as it relates to the CSU Guarantee to the extent such a breach exists;
AND WHEREAS the Majority Lenders have agreed to waive the potential breach of
Section 8.02(5) solely as it relates to the CSU Guarantee to the extent such a breach exists;
AND WHEREAS the Borrowers have advised the Agent that the Parent has
incorporated a new Subsidiary being Tucows (Canada) Co. (the “New Guarantor”);
AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors have
agreed to amend the Credit Agreement, as more particularly set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
1.01 Capitalized Terms. All capitalized terms which are used herein without being
specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement.
ARTICLE 2
CONSENT
Consent. Subject to the terms of this Agreement, to the extent such consent becomes necessary pursuant to
the terms of the Credit Agreement, the Lenders hereby consent to permit the Verizon Agreement Resolution,
which consent shall be effective as of the Third Amendment Effective Date. The undersigned hereby
acknowledge that the foregoing consent applies only to the Verizon Agreement Resolution and does not
establish a course of dealing upon which the Borrowers or any other Loan Party may rely on in the future nor
shall it be deemed to prejudice
- 3 -
any right or remedy that the Agent or the Lenders may now have or may have in the future
under or in connection with any Loan Document or any other instrument or agreement referred
to therein.
ARTICLE 3
WAIVER
1.01Waiver.
(a)Subject to the terms of this Agreement and in accordance with Section 18.01 of
the Credit Agreement, the Agent and the Majority Lenders hereby waive any
Default or Event of Default resulting from the CSU Guarantee Disclosure to the
extent any such Default or Event of Default exists, and agree to refrain from filing
any legal action or instituting or enforcing any rights and remedies that the Agent
or the Lenders may have against the Borrowers or any of the other Loan Parties
with respect to any Default or Event of Default resulting from the CSU Guarantee
Disclosure (collectively, the “Waiver”). The Waiver shall apply only with respect
to Section 8.02(5) in connection with the CSU Guarantee Disclosure. The Loan
Parties shall be in complete compliance with the Section 8.02(5) at all times in all
other respects. The Waiver shall (a) in no way be deemed an agreement by the
Agent or the Lenders to waive non-compliance with Section 8.02(5) as of all
other dates, and (b) not limit or impair the Agent’s right to demand strict
performance of Section 8.02(5) in all other circumstances and as of all other
dates.
(b)This Agreement and the Waiver provided herein relates only to the CSU
Guarantee Disclosure and any Default or Event of Default resulting therefrom to
the extent any such Default or Event of Default exists, and shall be limited
precisely as written and shall not be deemed to be a waiver of compliance in the
future or a waiver of any preceding or succeeding breaches of the same or any
other covenants or provisions of any Loan Document. This Agreement shall not
otherwise prejudice any right or remedy which the Agent or the Lenders may now
have or may have in the future under or in connection with any Loan Document.
(c)This Agreement shall be construed in connection with and as part of the Loan
Documents, and all terms, conditions, representations, warranties, covenants
and agreements set forth in the Loan Documents are hereby ratified and
confirmed and shall remain in full force and effect.
ARTICLE 4
AMENDMENTS TO CREDIT AGREEMENT
1.01General Rule. Subject to the terms and conditions herein contained, effective as of the
Third Amendment Effective Date, the Credit Agreement is hereby amended to the extent
necessary to give effect to the provisions of this agreement and to incorporate the provisions of
this agreement into the Credit Agreement.
1.02Amendments to Credit Agreement.
Effective as of the Third Amendment Effective Date, the Credit Agreement is hereby amended by deleting the
stricken text (indicated textually in the same manner as the following example: stricken text) and adding
the double-
- 4 -
underlined text (indicated textually in the same manner as the following example:
double-underlined text) as set forth in the pages of the Credit Agreement
attached to this Amendment as Exhibit A.
(a)Notwithstanding anything to the contrary herein, including in this Amendment and
in the pages of the Credit Agreement attached to this Amendment as Exhibit A,
the Agent, the Lenders and the Borrowers acknowledge and agree as follows:
(i)For the purposes of this Amendment, “CIBC Commitment” shall mean
the relevant amount designated as the Canadian Imperial Bank of
Commerce credit facility commitment set forth under Canadian Imperial
Bank of Commerce’s name on Schedule 8.
(ii)The definition of “Maturity Date” solely with respect to the CIBC
Commitment shall mean September 22, 2027 (the “Original Maturity
Date”) and the extension of the Maturity Date pursuant to this
Amendment shall not apply to the CIBC Commitment. For greater
certainty, any amendment or extension of the Original Maturity Date as it
relates to the CIBC Commitment shall not be permitted or agreed to by
the Agent, or any Lender, without the prior written consent of Canadian
Imperial Bank of Commerce.
(iii)On or prior to the Original Maturity Date, the Agent and the Borrowers
shall work cooperatively to assign the CIBC Commitment, in full or in part,
to one or more Replacement Lenders. On the date of such assignment:
(A)the Replacement Lender(s) shall pay to Canadian Imperial Bank
of Commerce, an amount equal to the sum of (a) an amount equal
to the principal of, and all accrued interest on, all outstanding
Advances of Canadian Imperial Bank of Commerce, (b) an
amount equal to all unreimbursed drawings that have been funded
by Canadian Imperial Bank of Commerce, together with all then
unpaid interest with respect thereto at such time, and (c) an
amount equal to all accrued, but theretofore unpaid fees owing to
Canadian Imperial Bank of Commerce pursuant to the Credit
Agreement; and
(B)the Borrowers shall pay any amounts payable to Canadian
Imperial Bank of Commerce in respect to any breakage costs or
otherwise owed as a consequence of such repayment or
otherwise as if it were a prepayment.
If the CIBC Commitment has not been assigned to a Replacement Lender(s) by the Original Maturity Date,
the Commitment shall automatically be reduced by the amount of the CIBC Commitment to U.S.$
212,500,000 and the Borrowers shall repay the Accommodations Outstanding made by Canadian Imperial
Bank of Commerce to the Borrowers in connection with the CIBC Commitment, together with all accrued
interest and Fees and other amount payable to Canadian Imperial Bank of Commerce in connection with the
Credit Facility, on the Original Maturity Date. For greater certainty, failure by the Borrowers to
repay the Accommodations Outstanding made by Canadian Imperial
Bank of Commerce to the Borrowers in connection with the CIBC
Commitment, together with all accrued interest and Fees and other
amount payable to Canadian Imperial Bank of Commerce in connection
- 5 -
with the Credit Facility (the “CIBC Repayment Amount”) in accordance
with the foregoing shall be an immediate Event of Default under the
Credit Agreement, which shall not be permitted to be waived by the
Agent, or any Lender without the prior written consent of Canadian
Imperial Bank of Commerce, and until full repayment of the CIBC
Repayment Amount no further Advances under the Credit Agreement
shall be made by any Lender without the prior written consent of
Canadian Imperial Bank of Commerce.
ARTICLE 5
CONDITIONS PRECEDENT
1.01This Amendment shall be effective on the date upon which the Agent has received (such
date being the “Third Amendment Effective Date”):
(a)a fully executed copy of this Amendment;
(b)payment, on behalf of the Lenders, of an amendment fee in the amount of
USD$100,000, which fee shall be paid by the Agent to each Lender in accordance with such
Lender’s pro rata share of the Credit Facility;
(c)a Compliance Certificate (in the form amended hereby and attached hereto at
Exhibit A);
(d)a legal opinion from counsel to the Loan Parties as to such matters customary in a
transaction of this nature and in form and substance reasonably satisfactory to the Agent and its
counsel;
(e)a copy (certified by an authorized officer of the applicable Loan Party) of (i) the
charter documents and by-laws (or equivalent) of each Loan Party (ii) the resolutions of the
board of directors (or equivalent governing body) of each Loan Party approving the borrowing
and other matters contemplated by this Agreement; and (iii) all other instruments evidencing
necessary corporate or other action of each Loan Party with respect to such matters;
(f)a certificate of a senior officer of each Loan Party certifying the names and true
signatures of its officers authorized to sign this Agreement and the Loan Documents to which it
is a party; and
(g)a certificate of status, compliance, good standing or like certificate, if applicable,
with respect to each Loan Party issued by the appropriate Governmental Entity in the
jurisdiction of its incorporation or formation.
ARTICLE 6
CONDITIONS SUBSEQUENT
Joinder of New Guarantor. Within thirty (30) days of the date hereof, the Loan Parties shall deliver, or cause
to be delivered, the following documents related to the New Guarantor:
(a)a general security agreement executed by the New Guarantor in favour of the
Agent;
(b)a guarantee executed by the New Guarantor in favour of the Agent;
- 6 -
(c)an assignment of insurance executed by the New Guarantor in favour of the
Agent;
(d)updated schedules to the Credit Agreement incorporating the appropriate
disclosure of the New Guarantor;
(e)a legal opinion from counsel to the New Guarantor as to such matters customary
in a transaction of this nature and in form and substance reasonably satisfactory
to the Agent and its counsel;
(f)a copy (certified by an authorized officer of the New Guarantor) of (i) the charter
documents and by-laws (or equivalent) of the New Guarantor; (ii) the resolutions
of the board of directors (or equivalent governing body) of the New Guarantor
approving the guarantee and other matters contemplated by this Agreement and
the Credit Agreement; and (iii) all other instruments evidencing necessary
corporate or other action of the New Guarantor with respect to such matters;
(g)a certificate of a senior officer of the New Guarantor certifying the names and
true signatures of its officers authorized to sign this Agreement and the Loan
Documents to which it is a party;
(h)a certificate of status with respect to the New Guarantor issued by the
appropriate Governmental Entity in the jurisdiction of its incorporation or
formation; and
(i)a certificate of insurance of the New Guarantor, in form and substance
satisfactory to the Agent.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
1.01Representations and Warranties. Each of the Loan Parties hereby represents and
warrants to the Lenders that the representations and warranties which are contained in Section
6 of the Credit Agreement, as amended herein, are true and correct on the date hereof as if
made on the date hereof, except in each case to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true and correct as of such
earlier date.
ARTICLE 8
MISCELLANEOUS
Future References to the Credit Agreement. On and after the date of this Agreement and/or the effective
dates referenced herein, each reference in the Credit Agreement to “this agreement”, “hereunder”, “hereof”,
or words of like import referring to the Credit Agreement, and
each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or
words of like import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall
continue to be in full force and effect and is hereby in all respects ratified and confirmed.
- 7 -
1.02Ratification and Confirmation of Loan Documents. Except as specifically amended by
this Agreement, the Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed.
1.03Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable therein.
1.04Successors and Assigns. This Agreement shall enure to the benefit of and shall be
binding upon the parties hereto and their respective successors and permitted assigns.
1.05Conflict. If any provision of this Agreement is inconsistent or conflicts with any provision
of the Credit Agreement, the relevant provision of this Agreement shall prevail and be
paramount.
1.06Further Assurances. Each of the Loan Parties shall do, execute and deliver or shall
cause to be done, executed and delivered all such further acts, documents and things as the
Lenders may reasonably request for the purpose of giving effect to this Agreement and to each
and every provision hereof.
1.07Counterparts. This Agreement may be executed in one or more counterparts, and may
be delivered by facsimile or electronic transmission, each of which shall be deemed to be an
original and all of which taken together shall be deemed to constitute one and the same
instrument.
(The remainder of this page has been intentionally left blank.)
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
Agent:BANK OF MONTREAL, as Administrative
Agent and Sole Bookrunner
By: /s/ Daniel Pichini
Name: Daniel Pichini
Title:Senior Director
By: /s/ Josip Gojmerac
Name: Josip Gojmerac
Title:Managing Director
Lenders:BANK OF MONTREAL, as Lender
By: /s/ Josip Gojmerac
Name: Josip Gojmerac
Title:Managing Director
By: /s/ Emma Gul
Name: Emma Gul
Title:Director
- 8 -
BMO BANK, N.A., as Lender
By:
Name:
Title:
By:
Name:
Title:
Third Amendment to Credit Agreement
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
Agent:BANK OF MONTREAL, as Administrative
Agent and Sole Bookrunner
By:
Name: Daniel Pichini
Title:Senior Director
By:
Name: Josip Gojmerac
Title:Managing Director
Lenders:BANK OF MONTREAL, as Lender
By:
Name: Josip Gojmerac
Title:Managing Director
By:
Name: Emma Gul
Title:Director
BMO BANK, N.A., as Lender
By: /s/ Charles Reggie Rice
Name:
Title:
Charles Reggie Rice
Vice President
By:
Name:
Title:
Third Amendment to Credit Agreement
THE TORONTO-DOMINION BANK, as Lender
and Co-Syndication Agent
By: /s/ Justin Whiteside___________________
    Name: Justin Whiteside
    Title: Managing Director, TD Innovation Partners
By: /s/ Mark Kiyonaga________________________
    Name: Mark Kiyonaga
    Title: Managing Director, Capital Solutions
Third Amendment to Credit Agreement
BANK OF NOVA SCOTIA, as Lender and Co-
Syndication Agent
By: /s/ Beatriz Martinez_______________
    Name: Beatriz Martinez
    Title: Director National Accounts
By: /s/ Leon Arendtsz________________
    Name: Leon Arendtsz
    Title: Director National Accounts
Third Amendment to Credit Agreement
CANADIAN IMPERIAL BANK OF
COMMERCE, as Lender
By: /s/ Adam Weiers
    ________________________________
    Name: Adam Weiers
    Title: Authorized Signatory
By: /s/ Oleg Dudchenko
    ________________________________
    Name: Oleg Dudchenko
    Title: Authorized Signatory
Third Amendment to Credit Agreement
NATIONAL BANK OF CANADA, as Lender
By: ___/s/ David Bernstein________
    Name: David Bernstein
    Title: Director
By: ___/s/ Scott Morrison_________
    Name: Scott Morrison
    Title: Director
Third Amendment to Credit Agreement
BUSINESS DEVELOPMENT BANK OF
CANADA, as Lender
By: ___/s/ David Wearing__________
    Name: David Wearing
    Title: Director, Syndicated Financing
By: ___/s/ Conor Jefferies________
    Name: Conor Jefferies
    Title: Associate Director, Syndicated Financing
Third Amendment to Credit Agreement
ROYAL BANK OF CANADA (formerly, HSBC
BANK CANADA), as Lender
By: ___/s/ Seema Pasha____________
    Name: Seema Pasha
    Title: Director
By: ______________________________
    Name:
    Title:
Third Amendment to Credit Agreement
Docusign Envelope ID: 04334863-6195-841B-83AA-607B27335B8F
Borrowers:
TUCOWS INC., as Parent and U.S. Borrower
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Secretary and Chief Financial
Officer
TUCOWS.COM CO., as Canadian Borrower
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Treasurer, Secretary and Chief
Financial Officer
TING INC., as U.S. Borrower
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Chief Executive Officer and Chief
Financial Officer
TUCOWS (DELAWARE) INC. as U.S.
Borrower
By: _/s/ Ivan Ivanov_____________________
Name: Ivan Ivanov
Title:Treasurer and Chief Financial
Officer
TUCOWS (EMERALD), LLC, as U.S.
Borrower
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Chief Financial Officer
[Signature Page to Third Amendment to Credit Agreement]
WAVELO, INC., as U.S. Borrower
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Treasurer and Chief Financial
Officer
Docusign Envelope ID: 04334863-6195-841B-83AA-607B27335B8F
Acknowledged and Agreed to by the Guarantors as of the date first written above.
TUCOWS DOMAINS SERVICES, INC., as
Guarantor
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Treasurer, Secretary, and Chief
Financial Officer
eNOM, LLC, as Guarantor
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Treasurer, Secretary and Chief
Financial Officer
ASCIO TECHNOLOGIES, CORP., as
Guarantor
By: /s/ Ivan Ivanov
Name: Ivan Ivanov
Title:Treasurer, Secretary, and Chief
Financial Officer
[Signature Page to Third Amendment to Credit Agreement]
Exhibit A
Amendments to Credit Agreement
68621058.15
See attached
Exhibit A to SecondThird Amendment to Credit Agreement dated August <*>July 27, 20252026
TUCOWS.COM CO.
as Canadian Borrower
-and -
TUCOWS (DELAWARE) INC., TING INC., TUCOWS (EMERALD), LLC, WAVELO, INC. and
TUCOWS Inc.
as U.S. Borrowers
-and -
BANK OF MONTREAL
as Agent, Lead Swap Arranger and Sole Bookrunner
-and -
The Toronto-Dominion Bank and Bank of Nova Scotia
as Co-Syndication Agent
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THE FINANCIAL INSTITUTIONS IDENTIFIED
ON THE SIGNATURE PAGES HERETO
as Lenders
CREDIT AGREEMENT
Dated as of September 22, 2023
TABLE OF CONTENTS
Page
Article 1 INTERPRETATION1
Section 1.01  Defined Terms1
Section 1.02  Gender and Number.                  4142 Section
1.03  Interpretation not Affected by Headings, etc.    4142 Section 1.04 
Currency.                          4142 Section 1.05  Certain
Phrases, etc.                  4142 Section 1.06  Time of the
Essence.                  4142 Section 1.07  Accounting Terms.                   
4142 Section 1.08  Non-Business Days.                  4243
Section 1.09  Incorporation of Schedules.              4243 Section
1.10  Reference to Agent or Lenders.            4243 Section 1.11 
References to Time of Day43
Section 1.12  References to Applicable Laws43
Section 1.13References to Agreements. 4344
Section 1.14Rateable Portion of Accommodations.4344
Section 1.15Quebec Matters. 4344
Section 1.16Permitted Liens. 4445
Section 1.17Interest Rates 4445
Section 1.18Joint and Several Obligations. 4546
Article 2 CREDIT FACILITY4546
Section 2.01  Availability.                        4546 Section 2.02 
Commitments and Facility Limits.          4647 Section 2.03  Credit
Facility Accordion                4647 Section 2.04  Use of Proceeds.                   
4748 Section 2.05  Mandatory Repayments.                4748
Section 2.06  Mandatory Prepayments48
Section 2.07  Repayments of Credit Excess.            4849 Section
2.08  Voluntary Prepayments49
Section 2.09  Payments under this Agreement.4950
Section 2.10  Application of Payments and Prepayments.    4950
Section 2.11  Computations of Interest and Fees.          5051 Section
2.12  Adjustment for Currency Fluctuations.      5051 Section 2.13 
Standby Fee51
Section 2.14Upfront Fee 5152
Section 2.15Defaulting Lender Adjustments. 5152
Section 2.16Replacement Lenders. 5455
Article 3 ADVANCES5455
Section 3.01The Advances. 5455
Section 3.02Procedure for Borrowing. 5556
Section 3.03Conversions and Rollovers Regarding Advances.5657
Section 3.04  Circumstances Affecting SOFR Loans and CORRA
Loans 5657
Section 3.05Interest on Advances. 5859
Section 3.06Benchmark Replacement Setting – SOFR6061
Section 3.07Canadian Benchmark Replacement Setting6263
Section 3.08Inability to Determine Rates – CORRA.6465
Article 4 LETTERS OF CREDIT6566
Section 4.01  Letters of Credit.                    6566 Section 4.02 
Issue Notice.                        6566 Section 4.03  Form of
Letters of Credit66
Section 4.04  Procedure for Issuance of Letters of Credit.6667
Section 4.05 Payment of Amounts Drawn Under Letters of Credit. 6667
Section 4.06 Fees. 6768
Section 4.07  Obligations Absolute. 6869
Section 4.08  Indemnification; Nature of Fronting
Letter of Credit Lender’s Duties.6869
Section 4.09Repayments. 6970
Section 4.10Cash Collateral.7071
Article 5 SECURITY/GUARANTEES7172
Section 5.01  Security.                          7172 Section 5.02 
Additional Guarantors72
Section 5.03  Mortgaged Property.7273
Section 5.04Obligations Secured by the Security.          7273
Section 5.05Further Assurances.                      7374 Section 5.06
Security Principles                        7374 Article 6 CONDITIONS OF
LENDING75
Section 6.01Conditions Precedent to Effectiveness75
Section 6.02Conditions Precedent to All Accommodations and
Conversions.7677
Section 6.03No Waiver. 7778
Article 7 REPRESENTATIONS AND WARRANTIES7778
Section 7.01Representations and Warranties.              7778
Section 7.02Survival of Representations and Warranties.      8485 Article
8 COVENANTS OF THE BORROWER85
Section 8.01Affirmative Covenants85
Section 8.02Negative Covenants. 9293
Section 8.03Financial Covenants.9698
Article 9 EVENTS OF DEFAULT9798
Section 9.01Events of Default.9798
Section 9.02Remedies Upon Demand and Default.100101
Section 9.03Application of Funds. 100101
Article 10 YIELD PROTECTION101102
Section 10.01Increased Costs. 101102
Section 10.02Taxes. 103104
Section 10.03Mitigation Obligations: Replacement of Lenders.105106
Section 10.04Illegality. 106107
Article 11 RIGHT OF SETOFF106108
Section 11.01Right of Setoff. 106108
Article 12 SHARING OF PAYMENTS BY LENDERS107108
Section 12.01Sharing of Payments by Lenders. 107108
Article 13 AGENT’S CLAWBACK108109
Section 13.01Agent’s Clawback. 108109
Article 14 AGENCY109110
Section 14.01Appointment and Authority.109110
Section 14.02 Rights as a Lender. 109110
Section 14.03 Exculpatory Provisions. 109111
Section 14.04 Reliance by Agent. 110111
Section 14.05 Indemnification of Agent. 110112
Section 14.06 Delegation of Duties. 111112
Section 14.07 Replacement of Agent. 111112
Section 14.08 Non-Reliance on Agent and Other Lenders. 111113
Section 14.09 Collective Action of the Lenders. 112113
Section 14.10 Anti-Money Laundering Legislation. 112114
Section 14.11 No Other Duties, etc. 113114
Section 14.12 Erroneous Payments By The Agent113115
Section 14.13 Receipt of Payments 115116
Section 14.14 Bank Act Security 115117
Section 14.15  Removal of a Non-Consenting Lender117
Article 15 NOTICES: EFFECTIVENESS; ELECTRONIC COMMUNICATION116118
Section 15.01Notices, etc. 116118
Article 16 EXPENSES; INDEMNITY: DAMAGE WAIVER116119
Section 16.01Expenses; Indemnity: Damage Waiver. 116119
Article 17 SUCCESSORS AND ASSIGNS118120
Section 17.01Successors and Assigns. 118120
Article 18 AMENDMENTS AND WAIVERS121124
Section 18.01Amendments and Waivers 121124
Section 18.02Judgment Currency.122125
Article 19 GOVERNING LAW; JURISDICTION; ETC.123125
Section 19.01Governing Law; Jurisdiction; Etc.123125
Article 20 WAIVER OF JURY TRIAL124126
Section 20.01  Waiver of Jury Trial124126
Article 21 COUNTERPARTS; INTEGRATION; EFFECTIVENESS;
ELECTRONIC EXECUTION124126
Section 21.01Counterparts; Integration; Effectiveness; Electronic
Execution.124126
Article 22 TREATMENT OF CERTAIN INFORMATION: CONFIDENTIALITY125127
Section 22.01Treatment of Certain Information: Confidentiality;
Non-Public Information.125127
Article 23 ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA
FINANCIAL INSTITUTIONS126129
Section 23.01Acknowledgement and Consent to Bail In of EEA
Financial Institutions.126129
SCHEDULES
Schedules Relating to Accommodation
SCHEDULE 1
SCHEDULE 2
SCHEDULE 3
SCHEDULE 4
SCHEDULE 5
-Form of Borrowing Notice
-Form of Interest Rate Election Notice
-Form of Issue Notice
-Notice Periods and Amounts
-Applicable Margins
Schedules Relating to the Administration of the Credit Agreement
SCHEDULE 6
SCHEDULE 7
SCHEDULE 8
SCHEDULE 9
-Form of Assignment and Assumption
Agreement
-Form of Compliance Certificate
-Lender Commitments
-Form of Payment/Reduction Notice
Schedules Relating to Representations and Warranties
Schedule 5.03-Mortgaged Property
Schedule 7.01(6)-Material Authorizations
Schedule 7.01(7)-Litigation and Other Proceedings
Schedule 7.01(8)-Ownership of Assets
Schedule 7.01(10)-Real Property – Owned and Leased
Schedule 7.01(11)-Place of Business
Schedule 7.01(13)-Material Contracts
Schedule 7.01(15)-Taxes
Schedule 7.01(18)-Pension Plans
Schedule 7.01(23)-Intellectual Property
Schedule 7.01(25)-Collective Agreements
Schedule 8.01(13)-Authorizations, Intellectual Property
Schedule 8.01(17)
Schedule 8.01(21)
-Maintenance of Bank Accounts and
Service Accounts
-Post-Closing Undertaking
Schedule 8.02(5)-Guarantees
CREDIT AGREEMENT
THIS CREDIT AGREEMENT made as of September 22, 2023 among TUCOWS.COM
CO., as Canadian Borrower, TUCOWS (DELAWARE) INC., TING INC., TUCOWS
(EMERALD), LLC, WAVELO, INC., and TUCOWS INC. as U.S. Borrowers, BANK OF
MONTREAL, as Agent, Lead Swap Arranger and Sole Bookrunner, and the financial institutions
identified on the signature pages hereto, as Lenders.
WHEREAS the Borrowers have requested that the Lenders make certain credit facilities
available to the Borrowers and the Lenders have agreed to provide certain credit facilities to the
Borrowers on the terms and conditions herein set forth;
AND WHEREAS the Lenders wish the Agent to act on behalf of the Lenders on and
subject to the terms and conditions herein set forth;
NOW THEREFORE for good and valuable consideration the receipt and sufficient of
which is agreed to by each of the parties hereto, the parties hereto acknowledge and agree as
follows:
ARTICLE 1
INTERPRETATION
Section 1.01Defined Terms.
As used in this Agreement, the following terms have the following meanings:
“Accommodation” means (i) an Advance made by a Lender on the occasion of any
Borrowing; and (ii) the issue of a Letter of Credit by the Fronting Letter of Credit Lender on the
occasion of any Issue (each of which is a “Type” of Accommodation).
“Accommodation Notice” means a Borrowing Notice, an Interest Rate Election Notice
or an Issue Notice, as the case may be.
“Accommodations Outstanding” means, at any time in relation to (a) a Borrower and
any Lender, the amount of all Accommodations outstanding thereunder made to such Borrower
by such Lender; (b) a Borrower and all Lenders, the amount of all Accommodations outstanding
thereunder made to such Borrower by the Lenders, (c) the Borrowers and any Lender, the
amount of all Accommodations outstanding thereunder made to the Borrowers by such Lender;
and (d) the Borrowers and all Lenders, the amount of all Accommodations outstanding
thereunder made to the Borrowers by the Lenders. In determining Accommodations
Outstanding, the aggregate amount thereof shall be determined on the basis of the aggregate
principal amount of all outstanding Advances and the aggregate principal amount of all
outstanding Swingline Advances for which the Lenders are contingently liable pursuant to
Article 3 and the aggregate Face Amount of all outstanding Letters of Credit for which the
Lenders are contingently liable pursuant to Article 4. In determining Accommodations
Outstanding, the foregoing amounts shall be expressed in U.S. Dollars and each relevant
amount denominated in Canadian Dollars shall be converted (for purposes of such
determination only) into its Equivalent Amount in U.S. Dollars as of the date of determination.
“Accordion Effective Date” means the date the Agent notifies the Borrowers and the
Lenders that an increase in the Commitments has taken effect in accordance with Section 2.03.
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“Accordion Notice” has the meaning ascribed thereto in Section 2.03(1).
“Acquisition” means any transaction or series of related transactions for the purpose
of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the Assets of
a Person, or of any business or division of a Person, (b) the acquisition of in excess of fifty
percent (50%) of the Equity Interests of any Person or otherwise causing any Person to
become a Subsidiary of the Parent, or (c) an amalgamation, plan of arrangement, merger or
consolidation or any other combination with another Person, except any such merger or
consolidation involving such Person or a subsidiary in which the shares of capital stock of such
Person outstanding immediately prior to such merger or consolidation continue to represent, or
are converted into or exchanged for shares of capital stock that represent, immediately
following such merger or consolidation, at least a majority, by voting power, of the capital stock
of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a
wholly owned subsidiary of another corporation immediately following such merger or
consolidation, the parent corporation of such surviving or resulting corporation, and “Acquire”
and “Acquired” have meanings correlative thereto.
“Adjusted Daily Simple SOFR” means an interest rate per annum equal to (i) the Daily
Simple SOFR, plus (ii) 0.10% (10 basis points).
“Adjusted EBITDA” means, in respect of any fiscal period until January 31, 2026,
EBITDA for such fiscal period, plus the actual amount expensed in connection withfollowing
amounts (to the extent such amounts were deducted in determining consolidated net income):
non-recurring cash items related to transaction-related and transitional expenses including
severance, restructuring and advisory fees, and the portion (if any) of the Verizon Liability or
other similar liability to other carriers which was deducted in the determination of EBITDA for
such fiscal period. costs related to cancellation of the Verizon Agreement in an aggregate
amount not to exceed twenty percent (20%) of Adjusted EBITDA in any trailing twelve month
period (calculated prior to giving effect to such exclusion) as approved by the Agent.
“Adjusted Daily Compounded CORRA” means for purposes of any calculation, the
rate per annum equal to (a) Daily Compounded CORRA for such calculation plus (b) (i)
0.29547% per annum for an Interest Period of (1) month and (ii) 0.32138% per annum for an
Interest Period of three (3) months, provided that if Adjusted Daily Compounded CORRA as so
determined shall ever be less than the Floor, then Adjusted Daily Compounded CORRA shall
be deemed to be the Floor.
“Adjusted Term CORRA” means for purposes of any calculation, the rate per annum
equal to (a) Term CORRA for such calculation plus (b) (i) 0.29547% per annum for an Interest
Period of (1) month and (ii) 0.32138% per annum for an Interest Period of three (3) months,
provided that if Adjusted Term CORRA as so determined shall ever be less than the Floor, then
Adjusted Term CORRA shall be deemed to be the Floor.
“Adjusted Term SOFR” means with respect to any tenor, the per annum rate equal to
the sum of (i) Term SOFR as determined by the Agent plus (ii) 0.10% (10 basis points).
“Advances” means advances of funds made by a Lender under Article 3 and “Advance” means any one of
such advances. Advances may be denominated in Canadian Dollars (a “Canadian Dollar Advance”) or U.S.
Dollars (a “U.S. Dollar Advance”). A Canadian Dollar Advance is designated as a “Canadian Prime Rate
Advance”, a “Term CORRA Loan” or a “Daily Compounded CORRA Loan” and a U.S. Dollar Advance
may (in accordance with
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Article 2 and Article 3) be designated as a “SOFR Loan”, a “Base Rate (Canada) Advance”
or “Base Rate (United States) Advance”. Each of a Canadian Prime Rate Advance, a Term
CORRA Loan, a Daily Compounded CORRA Loan, a SOFR Loan, a Base Rate (Canada)
Advance and a Base Rate (United States) Advance is a “Type” of Advance.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK
Financial Institution.
“Affiliate” means, as applied to any Person, any other Person directly or indirectly
Controlling, Controlled by, or under common Control with, that Person.
“Agent” means Bank of Montreal, its successors and permitted assigns in its capacity
as an administration agent hereunder.
“Agreement” means this credit agreement and all schedules thereto, as amended,
supplemented or restated from time to time; and the expressions “Article” and “Section”
followed by a number mean and refer to the specified Article or Section of this Agreement.
“AML Legislation” has the meaning set out in Section 14.10.
“Annual Business Plan” means a business plan in respect of the Tucows Group, for a
Financial Year, approved by the board of directors of the Parent and disclosing all assumptions
made in the formulation thereof, which shall include a detailed Capital Expenditure budget and
projections on a quarterly basis, income statement, balance sheet and cashflow statement, and
compliance with all financial covenants in Section 8.03 herein.
“Anti-Corruption Laws” means the FCPA and any law, rule or regulation of any
jurisdiction concerning or relating to bribery or corruption that are applicable to any Loan Party
or any Subsidiary or Affiliate thereof.
“Anti-Terrorism Laws” means any federal, state or local laws relating to terrorism or
money laundering, including, without limiting the generality of the foregoing, the Executive
Order, the Canadian Sanctions Laws, the USA PATRIOT Act, the laws comprising or
implementing The Currency and Foreign Transactions Reporting Act, 31 U.S.C. §§5311-5330
and 12 U.S.C. §§1818(s) and 1820(b) (also known as the “Bank Secrecy Act”), the International
Emergency Economic Powers Act, 50 U.S.C. 1701, et. seq., the Trading with the Enemy Act,
50 U.S.C. App. 1, et. seq., 18 U.S.C. § 2332d, and 18 U.S.C. § 2339B, the laws administered
by the United States Treasury Department’s Office of Foreign Asset Control, and any sanctions
administered or enforced by the U.S. Department of State, Public Safety Canada, the United
Nations Security Council, the European Union, or His Majesty’s Treasury (as any of the
foregoing laws may from time to time be amended, renewed, extended, or replaced), in each
case to the extent that such laws relate to terrorism or money laundering and any other
applicable AML Legislation, all as amended, supplemented or replaced from time to time.
“Applicable Margin” means, at any time, the applicable margin, expressed in basis points per annum which
is in effect at such time based upon the Total Funded Debt to Adjusted EBITDA Ratio at such time as set forth
in the table in SCHEDULE 5. If applicable, each Applicable Margin shall be adjusted in the manner prescribed
in SCHEDULE 5 five (5) Business Days after the date the Agent receives a Compliance Certificate pursuant
to Section 8.01(2)(ii) calculating the Total Funded Debt to Adjusted EBITDA Ratio. Such adjusted Applicable
Margin shall apply in respect of (a) Advances, from and after such date, and (b) Letters of Credit, to
Letters of Credit fees calculated from and after such date. In the event that the Parent has not
delivered a Compliance Certificate in respect of any Financial Quarter as required pursuant to
Section 8.01(2)(iii)(B), the Applicable Margin shall be the highest rate provided for in any
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column of SCHEDULE 5 until such time as such Compliance Certificate has been delivered
(and thereafter shall correspond to the Applicable Margin calculated pursuant to the preceding
sentences hereof). At any time an Event of Default has occurred and is continuing the
Applicable Margins in SCHEDULE 5 shall in each case be increased by 200 bps.
“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments have
terminated or expired, the Applicable Percentages shall be the percentage of the total
Accommodations Outstanding represented by such Lender’s Accommodations Outstanding.
“Approved Fund” means, with respect to any Lender that is an investment fund that
invests in bank loans, any other investment fund that invests in bank loans and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment advisor.
“Arm’s Length” has the meaning interpreted for the purposes of the Income Tax Act
(Canada), as in effect as of the date hereof.
“Asset Sales” means, in respect of the Tucows Group, a sale, lease or sublease (as
lessor or sublessor), sale and leaseback, assignment, conveyance, transfer or other disposition
to, or any exchange of property with, any other Person, in one transaction or a series of
transactions, of all or any part of any Tucows Groups Entity’s businesses, assets or properties
of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now
owned or hereafter acquired, including the Equity Interests of any Subsidiary of the Parent
(including by issuance of such Equity Interests). For greater certainty, for purposes of Section
2.06(1), an Asset Sale shall not include Dispositions of Assets between any Loan Party and any
other Loan Party.
“Assets” means, with respect to any Person, any property, assets and undertakings of
such Person of every kind and wheresoever situate, whether now owned or hereafter acquired
(and, for greater certainty, includes any equity or like interest of such Person in any other
Person).
“Assignment and Assumption” means an assignment and assumption agreement
substantially in the form of SCHEDULE 6.
“Authorization” means, with respect to any Person, any authorization, order, permit,
approval, grant, licence, consent, right, franchise, privilege, certificate, judgment, writ,
injunction, award, determination, direction, decree, by-law, rule or regulation of any
Governmental Entity.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark,
as applicable, (i) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that
is or may be used for determining the length of an interest period pursuant to this Agreement or (ii) otherwise,
any payment period for interest calculated with reference to such Benchmark (or component thereof) that is
or may be used for determining any frequency of making payments of interest calculated with reference to
such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the
avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of
“Interest Period” pursuant to Section 3.06.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
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“Bail-In Legislation” means (a) with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law, regulation, rule or requirement for such EEA
Member Country from time to time that is described in the EU Bail-In Legislation Schedule and
(b)with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as
amended from time to time) and any other law, regulation or rule applicable in the United
Kingdom relating to the resolution of unsound or failing banks, investment firms or other
financial institutions or their affiliates (other than through liquidation, administration or other
insolvency proceedings).
“Bank Act Security” has the meaning ascribed thereto in Section 14.13
“Bank Act Security Lender” has the meaning ascribed thereto in Section 14.14.
“Base Rate (Canada)” means, for any day, a rate per annum equal to the greatest of (i)
the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1.00% and (iii) Adjusted Daily Simple SOFR in effect for such day plus 1.00%;
provided that to the extent such highest rate as calculated above shall, at any time, be less than
the Floor, such rate shall be deemed to be Floor for all purposes herein. Any change in the
Base Rate (Canada) due to a change in the Prime Rate, the Federal Funds Effective Rate or
Adjusted Daily Simple SOFR shall be effective on the opening of business on the day specified
in the public announcement of such change in the Prime Rate, the Federal Funds Effective
Rate or Adjusted Daily Simple SOFR, respectively. If the Base Rate (Canada) is being used as
an alternative rate of interest pursuant to Section 3.05 or Section 3.06, then the Base Rate
(Canada) shall be the greater of clauses (i) and (ii) above and shall be determined without
reference to clause (iii) above.
“Base Rate (United States)” means, for any day, a rate per annum equal to the
greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1.00% and (iii) Adjusted Daily Simple SOFR in effect for such day
plus 1.00%; provided that to the extent such highest rate as calculated above shall, at any time,
be less than the Floor, such rate shall be deemed to be Floor for all purposes herein. Any
change in the Base Rate (United States) due to a change in the Prime Rate, the Federal Funds
Effective Rate or Adjusted Daily Simple SOFR shall be effective on the opening of business on
the day specified in the public announcement of such change in the Prime Rate, the Federal
Funds Effective Rate or Adjusted Daily Simple SOFR, respectively. If the Base Rate (United
States) is being used as an alternative rate of interest pursuant to Section 3.05 or Section 3.06,
then the Base Rate (United States) shall be the greater of clauses (i) and (ii) above and shall be
determined without reference to clause (iii) above.
“basis point” or “bps” means 1/100th of one per cent.
“BDC” means Business Development Bank of Canada, together with its successors and assigns.
“Benchmark” means, at the election of the Borrowers, Daily Simple SOFR or the Term
SOFR Reference Rate, provided that if a Benchmark Transition Event has occurred with
respect to Daily Simple SOFR or the Term SOFR Reference Rate, or the then-current
Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent
that such Benchmark Replacement has replaced such prior benchmark rate pursuant to
Section 3.06.
“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate that
has been selected by the Agent and the Borrowers giving due consideration to (i) any selection
or recommendation of a replacement benchmark rate or the mechanism for determining such a
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rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a benchmark rate as a replacement for the then-current Benchmark
for U.S. dollar-denominated syndicated credit facilities at such time in Canada and the United
States, and (b) the related Benchmark Replacement Adjustment; provided, that if the
Benchmark Replacement as so determined pursuant to the above would be less than the Floor,
the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement
and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of
the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread
adjustment, or method for calculating or determining such spread adjustment, (which may be a
positive or negative value or zero) that has been selected by the Agent and the Borrowers
giving due consideration to (i) any selection or recommendation of a spread adjustment, or
method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant
Governmental Body and/or (ii) any evolving or then-prevailing market convention for
determining a spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark
Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Date” means the earliest to occur of the following events
with respect to the then-current Benchmark:
(1)in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,”
the later of (a) the date of the public statement or publication of information referenced therein
and (b) the date on which the administrator of such Benchmark (or the published component
used in the calculation thereof) permanently or indefinitely ceases to provide all Available
Tenors of such Benchmark (or such component thereof); or
(2)in the case of clause (3) of the definition of “Benchmark Transition Event,” the
first date on which such Benchmark (or the published component used in the calculation
thereof) has been determined and announced by the regulatory supervisor for the administrator
of such Benchmark (or such component thereof) to be non-representative; provided that such
non-representativeness will be determined by reference to the most recent statement or
publication referenced in such clause (3) and even if any Available Tenor of such Benchmark
(or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case
of clause (1) or (2) with respect to any Benchmark upon the occurrence of
the applicable event or events set forth therein with respect to all then-current Available Tenors
of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means, with respect to any Benchmark, the
occurrence of one or more of the following events with respect to such then-current
Benchmark:
(1)a public statement or publication of information by or on behalf of the administrator
of such Benchmark (or the published component used in the calculation thereof) announcing
that such administrator has ceased or will cease to provide all Available Tenors of such
Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time
of such statement or publication, there is no successor administrator that will continue to
provide any Available Tenor of such Benchmark (or such component thereof);
-7-
(2)a public statement or publication of information by the regulatory supervisor for the
administrator of such Benchmark (or the published component used in the calculation thereof),
the Federal Reserve Board of the United States, the NYFRB, an insolvency official with
jurisdiction over the administrator for such Benchmark (or such component), a resolution
authority with jurisdiction over the administrator for such Benchmark (or such component) or a
court or an entity with similar insolvency or resolution authority over the administrator for such
Benchmark (or such component), which states that the administrator of such Benchmark (or
such component) has ceased or will cease to provide all Available Tenors of such Benchmark
(or such component thereof) permanently or indefinitely; provided that, at the time of such
statement or publication, there is no successor administrator that will continue to provide any
Available Tenor of such Benchmark (or such component thereof); or
(3)a public statement or publication of information by the regulatory supervisor for the
administrator of such Benchmark (or the published component used in the calculation thereof)
announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or
as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have
occurred with respect to any Benchmark if a public statement or publication of information set
forth above has occurred with respect to each then-current Available Tenor of such Benchmark
(or the published component used in the calculation thereof).
“Benchmark Transition Start Date” means, in the case of a Benchmark Transition
Event, the earlier of (a) the applicable Benchmark Replacement Date, and (b) if such
Benchmark Transition Event is a public statement or publication of information of a prospective
event, the 90th day prior to the expected date of such event as of such public statement or
publication of information (or if the expected date of such prospective event is fewer than ninety
(90) days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” means the period (if any) (a) beginning at the time that a Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current
Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.06 and
(b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all
purposes hereunder and under any Loan Document in accordance with Section 3.06.
“Beneficial Ownership Certification” means a certification regarding beneficial
ownership, as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. §1010.230.
“Beneficiary” means, in respect of a Letter of Credit, the beneficiary named in the
Letter of Credit or the Issue Notice with respect thereto.
“BMO” means Bank of Montreal (including, Canadian Equipment Finance division of
the Bank of Montreal) and its Subsidiaries and Affiliates, BMO Bank N.A. (formerly, BMO Harris
Bank N.A.) (including, US Equipment Finance Division) and its Subsidiaries and Affiliates and
each of their respective successors and assigns.
“Bona Fide Debt Fund” means a bona fide debt fund, investment vehicle, regulated
banking entity or non-regulated lending entity that is primarily engaged in making, purchasing,
holding or otherwise investing in loans, commitments and similar extensions of credit in the
ordinary course of business.
“Borrower Materials” has the meaning specified in Section 22.01(4).
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“Borrowers” means, collectively, the Canadian Borrower and the U.S. Borrowers and
“Borrower” means any one of them, as applicable.
“Borrower’s Account” means, in respect of all of the Borrowers, (i) in respect of
Canadian Dollars, Tucows.com Co’s Canadian Dollar account with BMO, bearing account no.
0002-1547881; (ii) in respect of U.S. Dollars, Tucows Inc.’s U.S. Dollar account with BMO,
bearing account no. 4238721.
“Borrowing” means a borrowing consisting of one or more Advances.
“Borrowing Notice” has the meaning specified in Section 3.02(1).
“Business” means the provision of network access, domain names and other internet
services.
“Business Day” means any day of the year, other than a Saturday, Sunday or other
day on which banks are required or authorized to close in Toronto, Ontario or Montréal, Québec
and, where used in the context of (i) a Base Rate (Canada) Advance or Base Rate (United
States) Advance, is also a day on which banks are not required or authorized to close in New
York, New York; and (ii) a SOFR Loan, or any other calculation or determination involving
SOFR, the term “Business Day” means any day that is only a U.S. Government Securities
Business Day.
“Canadian Available Tenor” means, as of any date of determination and with respect to the then-current
Canadian Benchmark, as applicable, (x) if such Canadian Benchmark is a term rate, any tenor for such
Canadian Benchmark (or component thereof) that is or may be used for determining the length of an interest
period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with
reference to such Canadian Benchmark (or component thereof) that is or may be used for determining
any frequency of making payments of interest calculated with reference to such Canadian Benchmark
pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any
tenor for such
Canadian Benchmark that is then-removed from the definition of “Interest Period” pursuant to
Section 3.07(4).
“Canadian Benchmark” means, initially, the Term CORRA Reference Rate; provided
that if a Canadian Benchmark Transition Event has occurred with respect to the Term CORRA
Reference Rate, or the then-current Canadian Benchmark, then “Canadian Benchmark”
means the applicable Canadian Benchmark Replacement to the extent that such Canadian
Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.07.
“Canadian Benchmark Replacement”, means, with respect to any Canadian
Benchmark Transition Event:
(1)where a Canadian Benchmark Transition Event has occurred with respect to Term
CORRA Reference Rate, Daily Compounded CORRA; and;
(2)where a Canadian Benchmark Transition Event has occurred with respect to a
Canadian Benchmark other than the Term CORRA Reference Rate, the sum of: (i) the
alternate benchmark rate that has been selected by the Agent and the Borrowers giving due
consideration to (A) any selection or recommendation of a replacement benchmark rate or the
mechanism for determining such a rate by the Canadian Relevant Governmental Body or (B)
any evolving or then-prevailing market convention for determining a benchmark rate as a
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replacement to the then-current Canadian Benchmark for Canadian Dollar-denominated
syndicated credit facilities and (ii) the related Canadian Benchmark Replacement Adjustment.
If the Canadian Benchmark Replacement as determined pursuant to clause (1) or (2)
above would be less than the Floor, the Canadian Benchmark Replacement will be deemed to
be the Floor for the purposes of this Agreement and the other Loan Documents.
“Canadian Benchmark Replacement Adjustment” means, with respect to any
replacement of the then-current Canadian Benchmark with an Unadjusted Canadian
Benchmark Replacement, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has been selected
by the Agent and the Borrowers giving due consideration to (a) any selection or
recommendation of a spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of such Canadian Benchmark with the applicable Unadjusted
Canadian Benchmark Replacement by the Canadian Relevant Governmental Body or (b) any
evolving or then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of such Canadian
Benchmark with the applicable Unadjusted Canadian Benchmark Replacement for Canadian
Dollar syndicated credit facilities at such time.
“Canadian Benchmark Replacement Conforming Changes” means, with respect to the use or
administration of a Benchmark or the use, administration, adoption or implementation of any Benchmark
Replacement, any technical, administrative or operational changes (including changes to the definition of
“Prime Rate,” the definition of “Business Day,” the definition of “Interest Period” or any similar or analogous
definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and
making payments of interest, timing of Borrowing Notice or prepayment, conversion or continuation notices,
the applicability and length of lookback periods, the applicability of Section 2.09(3) and other technical,
administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and
implementation of any such rate or to permit the use and administration
thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent
decides that adoption of any portion of such market practice is not administratively feasible or if
the Agent determines that no market practice for the administration of any such rate exists, in
such other manner of administration as the Agent decides is reasonably necessary in
connection with the administration of this Agreement and the other Loan Documents).
“Canadian Benchmark Replacement Date” means the earliest to occur of the following
events with respect to the then-current Canadian Benchmark:
(1)in the case of clause (1) or (2) of the definition of “Canadian Benchmark Transition
Event,” the later of (i) the date of the public statement or publication of information referenced
therein and (ii) the date on which the administrator of such Canadian Benchmark (or the
published component used in the calculation thereof) permanently or indefinitely ceases to
provide all Canadian Available Tenors of such Canadian Benchmark (or such component
thereof); or
(2)in the case of clause (3) of the definition of “Canadian Benchmark Transition
Event,” the first date on which such Canadian Benchmark (or the published component used in
the calculation thereof) has been determined and announced by the regulatory supervisor for
the administrator of such Canadian Benchmark (or such component thereof) to be
non-representative; provided that such non-representativeness will be determined by reference
to the most recent statement or publication referenced in such clause (c) and even if any
Canadian Available Tenor of such Canadian Benchmark (or such component thereof) continues
to be provided on such date.
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For the avoidance of doubt, the “Canadian Benchmark Replacement Date” will be
deemed to have occurred in the case of clause (a) or (b) with respect to any Canadian
Benchmark upon the occurrence of the applicable event or events set forth therein with respect
to all then-current Canadian Available Tenors of such Canadian Benchmark (or the published
component used in the calculation thereof).
“Canadian Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to any then-current Canadian Benchmark:
(1)a public statement or publication of information by or on behalf of the administrator
of such Canadian Benchmark (or the published component used in the calculation thereof)
announcing that such administrator has ceased or will cease to provide all Canadian Available
Tenors of such Canadian Benchmark (or such component thereof), permanently or indefinitely;
provided that, at the time of such statement or publication, there is no successor administrator
that will continue to provide any Canadian Available Tenor of such Canadian Benchmark (or
such component thereof);
a public statement or publication of information by the regulatory supervisor for the administrator of such
Canadian Benchmark (or the published component used in the calculation thereof), the Bank of Canada, an
insolvency official with jurisdiction over the administrator for such Canadian Benchmark (or such component),
a resolution authority with jurisdiction over the administrator for such Canadian Benchmark (or such
component) or a court or an entity with similar insolvency or resolution authority over the administrator for
such Canadian Benchmark (or such component), which states that the administrator of such Canadian
Benchmark (or such component) has ceased or will cease to provide all Canadian Available Tenors of such
Canadian Benchmark (or such component thereof) permanently or
indefinitely; provided that, at the time of such statement or publication, there is no successor
administrator that will continue to provide any Canadian Available Tenor of such Canadian
Benchmark (or such component thereof); or
(2)a public statement or publication of information by the regulatory supervisor for the
administrator of such Canadian Benchmark (or the published component used in the calculation
thereof) announcing that all Canadian Available Tenors of such Canadian Benchmark (or such
component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Canadian Benchmark Transition Event” will be
deemed to have occurred with respect to any Canadian Benchmark if a public statement or
publication of information set forth above has occurred with respect to each then-current
Canadian Available Tenor of such Canadian Benchmark (or the published component used in
the calculation thereof).
“Canadian Benchmark Unavailability Period” means, the period (if any) (a) beginning
at the time that a Canadian Benchmark Replacement Date has occurred if, at such time, no
Canadian Benchmark Replacement has replaced the then-current Canadian Benchmark for all
purposes hereunder and under any Loan Document in accordance with Section 3.07 and (b)
ending at the time that a Canadian Benchmark Replacement has replaced the then-current
Canadian Benchmark for all purposes hereunder and under any Loan Document in accordance
with Section 3.07.
“Canadian Borrower” means Tucows.com Co., a Nova Scotia corporation and its
successors and permitted assigns.
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“Canadian Defined Benefit Pension Plan” means any Canadian Pension Plan which
contains a “defined benefit provision” as defined in subsection 147.1(1) of the Income Tax Act
(Canada).
“Canadian Dollars” and “Cdn.$” means lawful money of Canada.
“Canadian Pension Plan” means each pension plan required to be registered under
Canadian federal or provincial pension law that is maintained or contributed to by any Loan
Party for its employees or former employees, but does not include the Canada Pension Plan or
the Quebec Pension Plan as maintained by the Government of Canada or the Province of
Quebec or a Canadian “multi-employer plan” as such term is defined in subsection 147.1(1) of
the Income Tax Act (Canada).
“Canadian Pension Termination Event” means, except as would not reasonably be
expected to result in a Material Adverse Change, (a) the termination or wind-up in whole or in
part of any Canadian Defined Benefit Pension Plan or the institution of proceedings by any
Governmental Entity to terminate or wind-up in whole or in part or have a trustee or a
replacement administrator appointed to administer a Canadian Defined Benefit Pension Plan,
(b) the occurrence of an event under the Income Tax Act (Canada) that could reasonably be expected to
affect the registered status of any Canadian Defined Benefit Pension Plan, (c) the taking of any action with
respect to any Canadian Pension Plan or any other extraordinary event or condition with respect to a
Canadian Pension Plan that could reasonably be expected to result in a Material Adverse Change, (d) the
receipt by any Loan Party of any order or notice of intention to issue an order from the applicable
pension standards regulator or similar
Governmental Entity that could reasonably be expected to affect the registered status or cause
the termination or wind-up (in whole or in part) of any Canadian Defined Benefit Pension Plan,
or (e) the receipt of notice by the administrator or the funding agent of any failure to remit
contributions to a Canadian Pension Plan.
“Canadian Prime Rate” means, for any day, the rate of interest per annum equal to the
greater of (i) the per annum rate of interest publicly quoted or established as the “prime rate”
of the Agent which it quotes or establishes for such day as its reference rate of interest in order
to determine interest rates for commercial loans in Canadian Dollars in Canada to its Canadian
borrowers; and (ii) Adjusted Term CORRA for an Interest Period of one (1) month plus 100
basis points per annum, adjusted automatically with each quoted or established change in such
rate, all without the necessity of any notice to the Borrowers or any other Person.
“Canadian Prime Rate Advance” has the meaning specified in the definition of
Advance.
“Canadian Relevant Governmental Body” means the Bank of Canada, or a committee
officially endorsed or convened by the Bank of Canada, or any successor thereto.
“Canadian Sanctioned Person” means any person that is a “designated person” or
“terrorist group” as described in any Canadian Sanctions Laws.
“Canadian Sanctions Laws” means any Canadian laws, regulations or orders
governing transactions in controlled goods or technologies or dealings with countries, entities,
organizations, or individuals subject to economic sanctions and similar measures or any laws
related to terrorism and money laundering, including, but not limited to, the Special Economic
Measures Act (Canada), the United Nations Act (Canada), the Freezing Assets of Corrupt
Foreign Officials Act (Canada), Part II.1 of the Criminal Code (Canada), the Export and Import
Permits Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
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(Canada) and any related regulations, in each case as amended, renewed, extended or
replaced from time to time.
“Capital Expenditures” of any Person means expenditures of such Person that, in
accordance with GAAP, would be classified as capital expenditures.
“Capital Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person under GAAP
and the amount of such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
“Cash Collateralize” means, to deposit in a deposit account subject to the control of the Agent or to pledge
and deposit with or deliver to the Agent, for the benefit of one or more of the Fronting Letter of Credit Lenders
or Lenders, as collateral for Letter of Credit Obligations or obligations of Lenders to fund participations in
respect of Letter of Credit Obligations, cash or deposit account balances or, if the Agent and the applicable
Fronting Letter of Credit Lender shall agree in their sole discretion, other credit support, in each case
pursuant to documentation in form and substance reasonably satisfactory to the Agent and the applicable
Fronting Letter of
Credit Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall
include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means (i) short-term obligations of, or fully guaranteed by, the
government of the United States of America or Canada, (ii) short-term obligations of, or fully
guaranteed by, the government of a State of the United States of America or of a Province of
Canada, in each case having a rating of “A-1” (or the then equivalent grade) or better by a
nationally recognized rating agency, (iii) commercial paper having a rating of “A-1” (or the then
equivalent grade) or better by S&P or of “P-1” by Moody’s, (iv) demand or current deposit
accounts maintained in the ordinary course of business with any commercial bank, (v)
certificates of deposit issued by and time deposits with any Schedule I Canadian chartered
bank or any other commercial bank or trust company (whether domestic or foreign) having
capital and surplus in excess of U.S.$500,000,000 and a senior unsecured rating of “A-1” or
better by S&P or “P-1” by Moody’s, or (vi) money market funds that invest substantially all of
their assets in any of the foregoing; provided in each case that the same has a term not
exceeding (A) one year in the case of (i), (ii) and (v) above, and (B) 180 days in the case of (iii)
and (vi) above.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any applicable Law, (b) any change in any
applicable Law or in the administration, interpretation or application thereof by any
Governmental Entity or (c) the making or issuance of any applicable Law by any Governmental
Entity. Notwithstanding anything herein to the contrary, (a) all requests, rules, guidelines,
requirements and directives promulgated by the Bank for International Settlements, and Basel
Committee on Banking Supervision (or any successor or similar authority) or by United States,
Canadian or foreign regulatory authorities, in each case pursuant to Basel III, and (b) the
Dodd-Frank Wall Street Reform and Consumer Protection Act (United States) and all requests,
rules, guidelines, requirements and directives thereunder or issued in connection therewith or in
implementation thereof, shall in each case be deemed to be a “Change in Law” regardless of
the date enacted, adopted, issued or implemented.
“Change of Control” means (i) any Person or group of Persons acting in concert shall
acquire control, directly or indirectly, of a majority by voting power of the issued and outstanding
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Equity Interests of the Parent having the right to vote for directors of the Parent; (ii) other than
in the case of a Permitted Replacement, individuals who were elected as members of the board
of directors of the Parent by the most recent resolutions of the shareholders of the Parent shall
no longer constitute a majority of the board of directors of the Parent at any time prior to the
next following resolutions of the shareholders of the Parent relating to the election of the same;
(iii) any sale, lease, exchange or other transfer (in one transaction or series of related
transactions) of all or substantially all of the Tucows Group’s property and assets; or (iv) any
Borrower or Guarantor shall cease to be a Wholly-Owned Subsidiary of the Parent (except as
otherwise agreed to by the Majority Lenders and other than Wavelo, Inc. as a result of the
issuance of common stock of Wavelo, Inc. pursuant to the Wavelo Stock Option Plan provided
that the Parent shall retain ownership at all times of, directly or indirectly, not less than 80% of
the common stock of Wavelo, Inc.).
“Claims” means all claims, demands, complaints, actions, suits, causes of action, assessments or
reassessments, charges, judgments, debts, liabilities, expenses, costs, damages or losses, contingent or
otherwise, including loss of value, professional fees, including fees of legal counsel on a solicitor and his or
her own client basis, and all costs incurred in
investigating or pursuing any of the foregoing or any proceeding relating to any of the
foregoing.
“Closing Date” means September 22, 2023.
“Code” means the Internal Revenue Code of 1986 (United States), as amended, and
regulations promulgated thereunder.
“Collateral” means the Assets of a Loan Party in respect of which the Agent on its own
behalf and on behalf of one or more of the Secured Parties has or will have a Lien pursuant to a
Loan Document.
“Committed” means, for the purposes of Section 2.06(4), the Parent or its applicable
Subsidiary shall have entered into a written agreement for the repair or replacement of the
applicable affected property.
“Commitment” means U.S.$240,000,000, as such amount may be increased or
reduced pursuant to this Agreement, and a “Lender’s Commitment” means, at any time, the
relevant amount designated as such and set forth under such Lender’s name on SCHEDULE 8,
in the assignment and assumption agreement executed and delivered pursuant to Article 17
pursuant to which it shall become a party hereto, or as otherwise increased or decreased
pursuant to this Agreement.
“Commodity Exchange Act” means the Commodity Exchange Act (7 USC § 1 et seq.)
(United States) as amended from time to time and any successor statute.
“Compliance Certificate” means a certificate of an officer of the Parent substantially in
the form attached hereto as SCHEDULE 7.
“Conforming Changes” means with respect to either the use or administration of Daily
Simple SOFR or Term SOFR or the use, administration, adoption or implementation of any
Benchmark Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate (Canada)” or “Base Rate (United States)” the definition
of “Business Day,” the definition of “Interest Period”, the definition of “U.S. Government
Securities Business Day”, the timing and frequency of determining rates and making payments
of interest, the timing of borrowing requests or prepayment, conversion or continuation notices,
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the applicability and length of lookback periods, the applicability of breakage provisions, and
other technical, administrative or operational matters) that the Agent decides may be
appropriate to reflect the adoption and implementation of any such rate or to permit the use and
administration thereof by the Agent in a manner substantially consistent with market practice
(or, if the Agent decides that adoption of any portion of such market practice is not
administratively feasible or if the Agent determines that no market practice for the
administration of any such rate exists, in such other manner of administration as the Agent
decides is reasonably necessary in connection with the administration of this Agreement and
the other Loan Documents).
“Consolidated Basis” means, in determining the results of operations or any amount in respect of any
period or at any time, the results of operations or amounts, as applicable: (i) when referencing the Tucows
Group and the Ting Fiber Group on a Consolidated Basis, the Tucows Group and the Ting Fiber Group taken
as a whole for such period or at such time; (ii) when referencing the Tucows Group on a Consolidated
Basis, the Tucows Group taken as a
whole for such period or at such time; or (iii) when referencing the Ting Fiber Group on a
Consolidated Basis, the Ting Fiber Group taken as a whole for such period or at such time, as
applicable.
“Contracts” means contracts, licences, leases, agreements, commitments,
entitlements or engagements to which any Loan Party is a party or by which any of them are
bound or under which any Loan Party has, or will have, any liability or contingent liability, and
warranties or guarantees (express or implied), but excluding any Authorizations.
“Control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise; “controlling” and “controlled” have corresponding
meanings.
“Controlled Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common Control which, together with
any Loan Party, are treated as a single employer under Section 414 of the Code.
“CORRA” means the Canadian Overnight Repo Rate Average administered and
published by the Bank of Canada (or any successor administrator).
“CORRA Loan” means a Term CORRA Loan or a Daily Compounded CORRA Loan, as
applicable, and “CORRA Loans” means Term CORRA Loans and Daily Compounded CORRA
Loans together.
“Covered Entity” means (a) each Loan Party and each Loan Party’s Subsidiaries, and
(b) each Person that, directly or indirectly, is in control of a Person described in clause (a).
“Credit Excess” means, as at a particular date, the amount, if any, by which the
aggregate amount of credit outstanding under the Credit Facility (excluding, for the avoidance
of doubt, any Eligible Hedging Agreement) as at the close of business on such date exceeds
the applicable limit of the Credit Facility as at the close of business on such date.
“Credit Facility” or “Facility” means, the revolving credit facility made available to the
Borrowers by the Lenders in accordance with Article 2 for the purposes specified in Section
2.03.
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“Daily Compounded CORRA” means, for any Business Day in a Interest Period, CORRA with interest
accruing on a compounded daily basis, with the methodology and conventions for this rate (applying the Daily
CORRA Lookback Period) being established by the Agent in accordance with the methodology and
conventions for this rate selected or recommended by the Canadian Relevant Governmental Body for
determining compounded CORRA for business loans; provided that if the Agent decides that any such
convention is not administratively feasible for the Agent, then the Agent may establish another convention in
its reasonable discretion; and provided that if the administrator has not provided or published CORRA and a
Canadian Benchmark Replacement Date with respect to CORRA has not occurred, then, in respect of any
day for which CORRA is required, references to CORRA will be deemed to be references to the last provided
or published CORRA.
“Daily Compounded CORRA Loan” means an Advance made pursuant to this
Agreement that bears interest at a rate based on Adjusted Daily Compounded CORRA.
“Daily CORRA Lookback Period” means two (2) Business Days in respect of any
lookback period in respect of Advances that are swaps, and five (5) Business Days in respect
of any lookback period for any other Advances.
“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum
equal to SOFR for the day (such day, the “SOFR Determination Day”), that is five (5) U.S.
Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government
Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S.
Government Securities Business Day, the U.S. Government Securities Business Day
immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the
SOFR Administrator on the SOFR Administrator’s Website; provided, however, that if as of 5:00
p.m. (New York City time) on any SOFR Determination Day Daily Simple SOFR for the
applicable tenor has not been published by the SOFR Administrator and a Benchmark
Replacement Date with respect to Daily Simple SOFR has not occurred, then Daily Simple
SOFR will be the Daily Simple SOFR as published by the SOFR Administrator on the first
preceding U.S. Government Securities Business Day for which Daily Simple SOFR was
published by the SOFR Administrator so long as such first preceding U.S. Government
Securities Business Day is not more than three (3) U.S. Government Securities Business Days
prior to such SOFR Determination Day; provided, that to the extent such rate as determined
above shall, at any time, be less than the Floor, such rate shall be deemed to be Floor for all
purposes herein.
“Data Centre Purchase Transaction” means the purchase of the data centre by a
Tucows Group Entity for purchase price not to exceed $7,500,000.
“DBRS” means DBRS Limited and DBRS Inc.
“Default” means an event which, with the giving of notice or passage of time, or both,
would, unless cured or waived, constitute an Event of Default.
“Defaulting Lender” means, subject to Section 2.15(2), any Lender that (a) has failed
to (i) fund all or any portion of its Accommodations within two (2) Business Days of the date
such Accommodations were required to be funded hereunder unless such Lender notifies the
Agent and the Parent in writing that such failure is the result of such Lender’s determination that
one or more conditions precedent to funding (each of which conditions precedent, together with
any applicable default, shall be specifically identified in such writing) has not been satisfied, or
(ii) pay to the Agent, each Fronting Letter of Credit Lender, or any other Lender any other amount required to
be paid by it hereunder (including in respect of its participation in Letters of Credit) within two (2) Business
Days of the date when due, (b) has notified the Parent, the Agent or any Fronting Letter of Credit Lender in
writing that it does not intend to comply with its funding obligations hereunder, or has made a public
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statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund an
Accommodation hereunder and states that such position is based on such Lender’s determination that a
condition precedent to funding (which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3)
Business Days after written request by the Agent or the Parent, to confirm in writing to the Agent and the
Parent that it will comply with its prospective funding obligations hereunder (provided that such Lender
shall cease to be a Defaulting Lender
pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the
Parent), or (d) has, or has a direct or indirect parent company that has, at any time after the
date hereof, (i) become the subject of a proceeding under any Law relating to bankruptcy,
insolvency, reorganization or relief of debtors including any plan of compromise or arrangement
or other similar corporate proceeding involving or affecting its creditors, or (ii) had appointed for
it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors
or similar Person charged with reorganization or liquidation of its business or assets, including
the Canada Deposit Insurance Corporation, Federal Deposit Insurance Corporation or any
other provincial, state or federal regulatory authority acting in such a capacity; provided that a
Lender shall not be a Defaulting Lender (x) solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company thereof by a
Governmental Entity so long as such ownership interest does not result in or provide such
Lender with immunity from the jurisdiction of courts within Canada or the United States or from
the enforcement of judgments or writs of attachment on its assets or permit such Lender (or
such Governmental Entity) to reject, repudiate, disavow or disaffirm any contracts or
agreements made with such Lender, or (y) in the case of a Lender (or its direct or indirect
parent company) that is Solvent, solely by virtue of the precautionary appointment of an
administrator, guardian, custodian or similar official by a Governmental Entity under or based
on the Law of the country where such Person is subject to home jurisdiction. Any determination
by the Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 2.15(2)) upon delivery of written notice of such
determination to the Parent, each Fronting Letter of Credit Lender and each Lender.
“Disposal” means any disposal by any means including dumping, incineration,
spraying, pumping, injecting, depositing or burying.
“Disposition” means, with respect to any Asset of any Person, any direct or indirect
sale, assignment, cession, transfer (including any transfer of title or possession), exchange,
conveyance, release or gift of such Asset, including by means of a Sale-Leaseback Transaction
(unless accounted for as a Capital Lease Obligation) and including any such transfer arising on
liquidation, dissolution or winding up of such Person; and “Dispose” and “Disposed” have
meanings correlative thereto.
“Distribution” means any amount paid to or on behalf of the shareholders, partners or
unitholders of any Tucows Group Entity, or to any Related Party thereto, by way of
management fees, dividends, redemption of shares, distribution of profits or otherwise, which
payments are made to such Persons in their capacity as shareholders, partners, unitholders or
owners of any Tucows Group Entity or otherwise, or any other direct or indirect payment in
respect of the earnings or capital of any of Tucows Group Entity to such Persons.
“Division/Series Transaction” shall mean, with respect to the Loan Parties and their
Subsidiaries, that any such Person (a) divides into two or more Persons (whether or not the
original Loan Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes
into, one or more series, in each case as contemplated under the laws of any jurisdiction.
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“E-System” means any electronic system approved by Agent, including Syndtrak®, Intralinks® and
ClearPar® and any other Internet or extranet based site, whether such electronic system is owned, operated
or hosted by Agent, any of its Related Parties or any other Person, providing for access to data protected by
passcodes or other security system.
“EBITDA” means, in respect of any fiscal period, without duplication (A) the
consolidated net income of the Tucows Group, on a Consolidated Basis, in such fiscal period
determined without including or deducting (i) unrealized gains or losses arising from hedging
agreements and other foreign currency transactions; (ii) gains or losses arising from or in
connection with any sale or other disposition of assets outside the ordinary course of business;
or (iii) gains or losses arising from or in connection with any revaluation of assets, or accretion
of contingent consideration; plus (B) the following amounts (to the extent such accounts were
deducted in determining such consolidated net income): Interest, income taxes, capital taxes,
depreciation, amortization, stock based compensation, non-cash charges relating to the
impairment of goodwill and other intangible assets and any other non-cash expenses, and
extraordinary, unusual or non-recurring expenses or acquisition and transaction costs approved
in writing by the Majority Lenders in their discretion (but specifically including non-recurring
professional fees and expenses relating to the establishment or restructuring of the Facilities);
all determined in accordance with GAAP.
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an EEA
Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of
an institution described in clause (a) of this definition, or (c) any financial institution established
in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b)
of this definition and is subject to consolidated supervision with its parent;
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person
entrusted with public administrative authority of any EEA Member Country (including any
delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means, in the case of an assignment pursuant to Section 17.01,
any Person (other than a natural person, any Loan Party, any Affiliate of a Loan Party, any
Defaulting Lender or any Ineligible Transferee) that meets the criteria set out in Section
17.01(2).
“Eligible Hedging Agreements” means any Hedging Agreement between a Loan
Party and any Lender or its Affiliates (the “Hedge Lender”), provided that (i) such Hedging
Agreement is not entered into for speculative purposes; (ii) the term of such Hedging
Agreement shall not exceed the Maturity Date; (iii) the terms and conditions of such Hedging
Agreement, including pricing, shall be determined by the Borrower, Lead Swap Arranger and
the applicable Hedge Lender and communicated to the applicable Loan Party for acceptance;
and (iv) the applicable Loan Party shall have executed and delivered an ISDA Master
Agreement, in form and substance satisfactory to the Lead Swap Arranger and the applicable
Hedge Lender, and provided further that any Hedge Termination Value owing by a Hedge
Lender upon designation of an Early Termination Date (as such term is defined in the ISDA
Master Agreement), has been assigned to the Agent as security for the Secured Obligations.
The Lead Swap Arranger has been appointed lead arranger on all Eligible Hedging Agreements
with the Loan Parties and shall promptly offer all eligible Hedge Lenders the opportunity to
participate in all Hedging Agreements at the discretion of the Borrowers.
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“Environment” includes the air, surface water, underground water, any land, soil or underground space
even if submerged under water or covered by a structure, all living
organisms and the interacting natural systems that include components of air, land, water,
organic and inorganic matters and living organisms in the environment or natural environment
as defined in any Environmental Law and “Environmental” shall have a similar extended
meaning.
“Environmental Law” means all applicable and legally enforceable federal, state,
provincial, municipal or local statutes, regulations, by-laws, and Orders of any Governmental
Entity, any binding guidelines, policies or rules of any Governmental Entity relating in whole or
in part to the Environment or the protection thereof and includes those laws relating to the
storage, generation, use, handling, manufacturer, processing, transportation, import, export,
treatment, Release, recycling or Disposal of any Hazardous Materials and any laws relating to
asbestos or asbestos-containing materials in the Environment, in the workplace or in any
building.
“Environmental Liabilities” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities) of the
Tucows Group directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, recycling,
treatment or Disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d)
the release or threatened Release of any Hazardous Materials into the Environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
“Environmental Permits” means all permits, certificates, approvals, consents,
authorizations, registrations and licences issued, granted, conferred or created by or acquired
from any Governmental Entity pursuant to any Environmental Laws.
“Equity Interests” means (a) all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of how designated)
of or in a corporation, partnership, limited liability company or equivalent entity whether voting
or non-voting, participating or non-participating, including common stock, preferred stock or any
other equity security and (b) all securities convertible into or exchangeable for any other Equity
Interests and all warrants, options or other rights to purchase, subscribe for or otherwise
acquire any other Equity Interests, whether or not presently convertible, exchangeable or
exercisable.
“Equivalent Amount” means, on any date, with respect to the specified amount of any
specified currency the amount of any other currency after giving effect to a conversion of the
specified amount of the first currency to the other currency at the spot rate quoted for wholesale
transactions by the Agent (or, if the Agent does not provide such spot rate quotation, a quoted
rate from another financial institution selected by the Agent); provided that if the conversion is
of Canadian Dollars to U.S. Dollars or of U.S. Dollars to Canadian Dollars, the rate used shall
be the Bank of Canada rate for such a conversion as of the close of the Business Day on such
date (as quoted or published from time to time by the Bank of Canada) if available.
“ERISA” means the Employee Retirement Income Security Act of 1974 (United States
of America), as amended, or any successor statute thereto, and the rules and regulations
promulgated thereunder.
“ERISA Event” means (a) a reportable event, within the meaning of Section 4043 of ERISA and the
regulations issued thereunder with respect to any Pension Benefit Plan
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(excluding those for which the provision for 30-day notice to the PBGC has been waived by
regulation); (b) the withdrawal of any Loan Party or any member of the Controlled Group from a
Multiple Employer Plan during a plan year in which such entity was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) or ERISA; (c) the providing of notice of intent to terminate a
Pension Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (d) the
institution by the PBGC of proceedings to terminate a Pension Benefit Plan or Multiemployer
Plan; (e) any event or condition (i) which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Pension Benefit Plan or
Multiemployer Plan, or (ii) that may result in termination of a Multiemployer Plan pursuant to
Section 4041A of ERISA; or (f) the partial or complete withdrawal within the meaning of
Sections 4203 and 4205 of ERISA, of any Loan Party or any member of the Controlled Group
from a Multiemployer Plan; (g) notice that a Multiemployer Plan is subject to Section 4245 of
ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not diligent, upon any Loan Party or any member of the Controlled Group.
“Erroneous Payment” has the meaning assigned to it in Section 14.12(1).
“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section
14.12(4).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect from time to
time.
month.
“Event of Default” has the meaning specified in Section 9.01.
“Excess” has the meaning specified in Section 2.12.
“Exchange Rate Determination Date” means the last Business Day of each calendar
“Existing Parent Guarantees” has the meaning specified in Section 8.02(5).
“Excluded Assets” has the meaning specified in Section 5.06.
“Excluded Swap Obligations” means, with respect to any Tucows Group Entity, in its
capacity as a Guarantor, any Swap Obligation if, and only to the extent that and for so long as,
all or a portion of the Guarantee by such Person, or the grant by such Person, of a security
interest in any of its Assets to secure, such Swap Obligation (or any Guarantee thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Person’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations thereunder at the
time the Guarantee by such Person or the grant by such Person of such security interest
becomes effective with respect to such Swap Obligation; provided, however, that if any
Guarantor that was not an “eligible contract participant” at the time any such guarantee of a
Swap Obligation under an Eligible Hedging Agreement was entered into thereafter becomes an
“eligible contract participant,” such Guarantor shall, by virtue of any applicable Pledge and
Security Agreement or joinder thereto and without any further action by any Person, be deemed
to have guaranteed the Swap Obligations under Eligible Hedging Agreements and granted a
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security interest to secure such Swap Obligations under Eligible Hedging Agreements, and
such Swap Obligations under Eligible Hedging Agreements shall no longer constitute Excluded
Swap Obligations with respect to such Guarantor. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the portion of
such Swap Obligation that is attributable to swaps for which such Guarantee or security interest
is or becomes illegal or unlawful under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or any application or official
interpretation of any thereof).
“Excluded Taxes” means, with respect to the Agent, any Lender or any other recipient
of any payment to be made by or on account of any obligation of any Borrower, the Guarantors
or any of their Subsidiaries hereunder or under any Loan Document, (a) taxes imposed on or
measured by its net income (however denominated) or capital, and franchise taxes and branch
profits Taxes, in each case (i) imposed on it by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is located or (ii) are
Other Connection Taxes, (b) any withholding tax payable as a result of such recipient not
dealing at Arm’s Length with the Borrowers, the Guarantors or any of their Subsidiaries (other
than when an Event of Default has occurred and is continuing), (c) Taxes imposed under FATCA
and (d) in the case of a Foreign Lender (other than (i) an assignee pursuant to a request by the
Parent under Section 10.03(2) or (ii) any other assignee to the extent that the Parent has
expressly agreed, in its sole discretion, that any withholding tax shall be an Indemnified Tax),
any withholding tax that (A) is imposed or assessed, and (B) is required by applicable Law to be
withheld or paid in respect of any amount payable hereunder or under any Loan Document to
such Foreign Lender where such applicable Law is in effect at the time such Foreign Lender
becomes a party hereto (or designates a new lending office) or is attributable to such Foreign
Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section
10.02(5), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive additional amounts
from any Loan Party with respect to such withholding tax pursuant to Section 10.02(1).
“Face Amount” means in respect of a Letter of Credit, the maximum amount which the
Fronting Letter of Credit Lender is contingently liable to pay the Beneficiary.
“FATCA” means Sections 1471 through 1474 of the Code and any regulations or
official interpretations thereof or any amended or successors version that is substantively
comparable and not materially more onerous to comply with (including any Revenue Ruling,
Revenue Procedure, Notice or similar guidance issued by the U.S. Internal Revenue Service
thereunder as a precondition to relief or exemption from Taxes under such provisions), any
agreements entered into pursuant to Section 1471(b)(1) of the Code or any fiscal or regulatory
legislation, rules or official administrative practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such Sections of the Code.
“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977 of the United States of
America, 15 U.S.C. §§78dd 1, et seq., as amended.
“Federal Flood Insurance” means federally backed Flood Insurance available under the National Flood
Insurance Program to owners of real property improvements located in Special Flood Hazard Areas in a
community participating in the National Flood Insurance Program.
“Federal Funds Rate” means, for any day, a fluctuating interest rate per annum equal
to the weighted average of the rates on overnight United States Federal funds transactions with
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members of the Federal Reserve System arranged by United States Federal funds brokers, as
published for the day (or if the day is not a Business Day, for the preceding Business Day) by
the NYFRB, or if such rate is not so published for any day which is a Business Day, the average
of the quotations for the day on such transactions received by the Agent from three United
States Federal funds brokers of recognized standing selected by the Agent, acting reasonably.
“Fees” means the fees payable by the Loan Parties under this Agreement or under any
other Loan Document.
“FEMA” means the Federal Emergency Management Agency, a component of the U.S.
Department of Homeland Security that administers the National Flood Insurance Program.
“Financial Quarter” means, in respect of each of the Parent, the financial quarters
ending March 31, June 30, September 30 and December 31.
“Financial Year” means, in respect of the Parent, its financial year commencing on
January 1 of each calendar year and ending on December 31 of such calendar year.
“Flood Insurance” means, for any Material Owned Real Property (including any
personal property Collateral located on such Material Owned Real Property) located in a
Special Flood Hazard Area, Federal Flood Insurance or private insurance reasonably
satisfactory to Agent, in either case, that (a) meets the requirements of FEMA and any other
applicable federal agencies, (b) includes a deductible not to exceed $100,000 and (c) has a
coverage amount equal to the lesser of (i) the insurable value of the buildings and any personal
property Collateral located on such Material Owned Real Property as determined by Agent or
(ii) the maximum policy limits set under the National Flood Insurance Program.
“Floor” means a rate of interest equal to zero percent (0%) per annum.
“Foreign Lender” means, with respect to any Borrower, any Lender that is not resident
for income tax or withholding tax purposes under the laws of the jurisdiction in which the
Borrower is resident for tax purposes on the date hereof and that is not otherwise considered or
deemed in respect of any amount payable to it hereunder or under any Loan Document to be
resident for income tax or withholding tax purposes in the jurisdiction in which the Borrower is
resident for tax purposes by application of the laws of that jurisdiction. For purposes of this
definition Canada and each Province and Territory thereof shall be deemed to constitute a
single jurisdiction and the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
“FRB” means the Board of Governors of the Federal Reserve System or any successor
thereto.
“Fronting Exposure” means, at any time that there is a Defaulting Lender, with respect to any Fronting
Letter of Credit Lender, such Defaulting Lender’s pro rata share of the outstanding Letter of Credit
Obligations with respect to Letters of Credit issued by such Fronting Letter of Credit Lender, other than Letter
of Credit Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders, Cash Collateralized in
accordance with the terms hereof or otherwise mitigated in a matter reasonably satisfactory to
the applicable Fronting Letter of Credit Lender.
“Fronting Letter of Credit Lender” means BMO, and any successor thereto hereunder
in such capacity.
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“Fronting Letter of Credit Lender’s Fronting Letter of Credit Commitment” means,
at any time, the relevant amount designated as such and set forth under such Lender’s name
on SCHEDULE 8 (or in respect of any other Lender, as otherwise agreed to by the Parent, the
Agent and such Lender) or in the assignment and assumption agreement executed and
delivered pursuant to Article 17 pursuant to which it shall become a party hereto (as reduced or
increased in accordance with the terms hereof).
“Funded Debt” in respect of any Person means obligations of such Person which are
considered to constitute debt in accordance with GAAP, including indebtedness for borrowed
money (in the case of the Borrowers, specifically including the Accommodations Outstanding),
Subordinated Debt, Purchase Money Obligations, Capital Lease Obligations, capitalized
interest, and the redemption price of any securities issued by such Person having attributes
substantially similar to debt (such as securities which are redeemable at the option of the
holder) and if (i) any Existing Parent Guarantee is determined to be an on-balance sheet liability
in accordance with GAAP, (it being understood that such determination shall not require
delivery of updated financial statements) or (ii) a final judgement or order is issued confirming
that the amount demanded is due and payable by Tucows Inc., the applicable Existing Parent
Guarantee; but excluding the following: accounts payable, future income taxes (both current
and long-term), obligations under hedging agreements which have not yet become due and
payable, and operating lease liabilities (both current and long-term); plus, to the extent
applicable until a renegotiation, sale or cancellation, the Verizon Liability and any similar
liabilities to other carriers.
“GAAP” means, generally accepted accounting principles in the United States, as in
effect from time to time, set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, in the statements
and pronouncements of the Financial Accounting Standards Board (or agencies with similar
functions and comparable stature and authority within the accounting profession) that are
applicable to the circumstances as of the date of determination.
“Governmental Entity” means any (i) multinational, federal, provincial, state,
municipal, local or other government, governmental or public department, central bank, stock
exchange, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii)
subdivision or authority of any of the foregoing, or (iii) quasi-governmental, public sector entity,
supra-national entity (including the European Union and the European Central Bank), private
body, self-regulatory organization (including the National Association of Insurance
Commissioners) and any other entity exercising any executive, legislative, judicial, regulatory,
expropriation, taxing or administrative authority under or for the account of any of the above.
“guarantee” means any agreement by which any Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of
any other Person, or agrees to maintain the net worth or working capital or other financial condition of any
other Person or otherwise assures any
creditor of such Person against loss, and shall include any contingent liability under any letter of
credit or similar document or instrument.
“Guarantee” means any guarantee delivered by any Person in connection herewith.
“Guarantor” means the Parent and each direct and indirect Subsidiary of the Parent
that has (a) executed a Guarantee (or an addendum to a Guarantee or other guarantee
agreement (in form and substance satisfactory to the Agent acting reasonably)) pursuant to
which it (and any general partner thereof) has provided an unconditional and unlimited
guarantee of the obligations of the Borrowers and the other Loan Parties under this Agreement
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and the other Loan Documents, (b) provided security in form and substance substantially
similar to that delivered on the Closing Date by the Borrowers (as determined by the Agent
acting reasonably); and (c) delivered to the Agent all resolutions (corporate, shareholder or
otherwise), certificates and appropriate legal opinions as the Agent may reasonably request.
Any of the foregoing entities shall cease to be a Guarantor in accordance with the provisions of
this Agreement and the other Loan Documents, and “Guarantor” means any one of them as
applicable. As at the date of this Agreement, the following are Guarantors for purposes hereof:
eNom, LLC, a Delaware limited liability company, Ascio Technologies, Corp., a Nova Scotia
corporation, Tucows Domains Services, Inc., a Delaware corporation, and, subject to any
express exclusions set forth herein or in any Guarantee, each Borrower in respect of the
obligations of the other Borrowers and the other Loan Parties under this Agreement and the
other Loan Documents. For the avoidance of doubt, no Ting Fiber Group Entity is a Guarantor.
“Hazardous Material” means any and all (i) contaminants, pollutants, toxic or
hazardous material or wastes (including petroleum and any by product or derivative thereof,
asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls); or (ii) substances
which are or may be defined, prohibited or regulated by Environmental Laws, or the generation,
manufacture, refining, production, processing, treatment, storage, handling, transportation,
transfer, use, Disposal, Release, discharge, spillage, seepage, or filtration of which is or shall
be restricted, prohibited or penalized by any applicable Environmental Law.
“Hedge Lender” has the meaning specified in the definition of “Eligible Hedging
Agreements”.
“Hedge Termination Value” means, in respect of any one or more Eligible Hedging
Agreements, after taking into account the effect of any legally enforceable netting agreement
relating to such Eligible Hedging Agreements, (a) for any date on or after the date such Eligible
Hedging Agreements have been closed out and termination values determined in accordance
therewith, such termination values, and (b) for any date prior to the date referenced in (a), the
amounts determined as the mark-to-market values for such Eligible Hedging Agreements, as
determined by the Lead Swap Arranger using its good faith, commercially reasonable estimates
at mid-market and in accordance with customary methods for calculating mark-to-market
values for substantially similar agreements by leading dealers in the relevant market.
“Hedging Agreement” means any agreement evidencing any Hedging Arrangements,
any combination of such Hedging Arrangements or any option with respect to any such
Hedging Arrangements.
“Hedging Arrangement” means, for any period and for any Person, any arrangement, transaction or
combination of transactions between such Person and any other Person commonly considered to be a
derivative, swap or hedging transaction, including interest rate
swaps, basis swaps, forward interest rate transactions, commodity swaps, interest rate options,
forward foreign exchange transactions, cap, floor and collar transactions, currency swaps,
cross-currency interest rate swaps, currency options and any other similar transaction
(including any option with respect to any of such transactions or arrangements and any swap or
derivative related to any index).
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Ineligible Transferee” means (i) certain Persons identified as “Disqualified Lenders” in
writing to the Agent by the Parent on or prior to the Closing Date; and (ii) operating companies
which are bona fide competitors of the Loan Parties or their Subsidiaries and such competitors’
subsidiaries and controlling equity holders (other than Bona Fide Debt Funds) as may be
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identified by name in writing to the Agent following the date of this Agreement (but only with the
consent of the Majority Lenders, not to be unreasonably withheld), by delivery of notice to the
Agent setting forth such person or persons. Notwithstanding the foregoing, no Person shall be
regarded as an Ineligible Transferee for purposes of this Agreement at any time that an
assignment or participation otherwise occurs in accordance with Section 17.01 while an Event
of Default has occurred and is continuing.
“Intellectual Property” means all rights, title and interests in or relating to intellectual
property and industrial property, whether registered or not, owned, licenced, used or held by
any Tucows Group Entity, in respect of: (a) inventions, pending patent applications (including
divisions, reissues, renewals, re-examinations, continuations, continuations-in-part and
extensions) and issued patents; (b) trade-marks, trade dress, trade-names, business names
and other indicia of origin; (c) copyrights; (d) industrial designs and similar rights; and (e) urls,
domain names and tag lines.
“Interest” means interest on loans, issuance fees in respect of letters of credit, and any
other charges or fees in connection with the extension of credit which are determined by
reference to the amount of credit extended, plus standby fees in respect of the unutilized
portion of any credit facility; but for greater certainty “Interest” shall not include capitalized
interest (for greater certainty, being interest which is accrued but not paid), agency fees,
arrangement fees, structuring fees, fees relating to the granting of consents, waivers,
amendments, extensions or restructurings, the reimbursement of costs and expenses, and any
similar amounts which may be charged from time to time in connection with the establishment,
administration or enforcement of the Credit Facility.
“Interest Coverage Ratio” means, in respect of any Rolling Period, the ratio of (i)
Adjusted EBITDA for such Rolling Period to (ii) Interest Expense for such Rolling Period.
“Interest Expense” means, in respect of any fiscal period, the aggregate amount of
Interest paid or payable in respect of the Funded Debt of the Tucows Group on a Consolidated
Basis in respect of such fiscal period (but for greater certainty, excluding any Interest which is
capitalized and not paid or payable during such fiscal period).
“Interest Payment Date” means, as to any SOFR Loan or CORRA Loan, the last day of each Interest
Period therefor and, in the case of any Interest Period of more than three months’ duration, each day prior to
the last day of such Interest Period that occurs at three month intervals after the first day of such Interest
Period, and on the maturity date; provided that, as to any such SOFR Loan or CORRA Loan, (i) if any such
date would be a day other than a Business Day, such date shall be extended to the next succeeding
Business Day unless such
next succeeding Business Day would fall in the next calendar month, in which case such date
shall be the next preceding Business Day and (ii) the Interest Payment Date with respect to any
such SOFR Loan or CORRA Loan that occurs on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in any applicable calendar month)
shall be the last Business Day of any such succeeding applicable calendar month.
“Interest Period” means
(a)the period commencing on the date a borrowing of any SOFR Loan is advanced,
continued, or created by conversion and ending on the numerically
corresponding day in the calendar month that is a period of one, three or six
months (in each case, subject to the availability thereof), as specified in the
applicable Borrowing Notice or Interest Rate Election Notice; or
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(b)the period commencing on the date a borrowing of any Term CORRA Loan is
advanced, continued, or created by conversion and ending on the numerically
corresponding day in the calendar month that is a period of one and three
months (in each case, subject to the availability thereof), as specified in the
applicable Borrowing Notice or Interest Rate Election Notice; or
(c)the period commencing on the date a borrowing of any Daily Compounded
CORRA Loan is advanced, continued, or created by conversion and ending on
the numerically corresponding day in the calendar month that is a period of one
and three months (in each case, subject to the availability thereof), as specified
in the applicable Borrowing Notice or Interest Rate Election Notice; or
provided, that, in each case (i) no Interest Period shall expire subsequent to the
Maturity Date; (ii) whenever the last day of any Interest Period would otherwise
be a day that is not a Business Day, the last day of such Interest Period shall be
extended to the next succeeding Business Day, provided that, if such extension
would cause the last day of an Interest Period for a SOFR Loan or CORRA
Loan, as applicable, to occur in the following calendar month, the last day of
such Interest Period shall be the immediately preceding Business Day; (iii) for
purposes of determining an Interest Period for a SOFR Loan or a CORRA Loan,
a month means a period starting on one day in a calendar month and ending on
the numerically corresponding day in the next calendar month; provided, that if
there is no numerically corresponding day in the month in which such an Interest
Period is to end or if such an Interest Period begins on the last Business Day of
a calendar month, then such Interest Period shall end on the last Business Day
of the calendar month in which such Interest Period is to end; and (iv) no tenor
that has been removed from this definition pursuant to Section 3.06 or Section
3.07 hereof, as applicable, shall be available for specification in such Borrowing
Notice or Interest Rate Election Notice.
“Interest Rate Election Notice” has the meaning specified in Section 3.03(2).
“Investment” means: (i) an investment made or held by a Person, directly or indirectly, in another Person
(whether such investment was made by the first-mentioned Person in such other Person or was acquired
from a third party); (ii) a contribution of capital; (iii) the acquisition or holding of common or preferred shares,
debt obligations, partnership interests and interests in joint ventures; provided however that if a transaction
would constitute a “Capital Expenditure”
as defined herein and would also constitute an “Investment” as defined herein, it shall be
deemed to constitute an Investment and not a Capital Expenditure; and (iv) advances, loans,
guarantees or other extensions of credit (other than in the ordinary course of business) or
capital contributions or the provision of any other financial assistance of any kind to (by means
of transfers of property, money or assets) any other Person, and, for greater certainty, includes
any Funded Debt of any other Person guaranteed by such Person.
“ISDA Master Agreement” means the applicable standard Master Agreement of the
International Swaps and Derivatives Association, Inc. in effect from time to time and includes all
its schedules, credit support annexes and all confirmations documented pursuant thereto.
“Issue” means an issue of a Letter of Credit by the Fronting Letter of Credit Lender
pursuant to Article 4.
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“Issue Date” has the meaning specified in Section 4.02.
“Issue Notice” has the meaning specified in Section 4.02.
“Judicial Order” has the meaning specified in Section 4.09(1).
“Laws” means all federal, state, local, or foreign law (statutory or common), statutes,
codes, ordinances, decrees, treaties, rules, regulations, municipal by-laws, judicial or arbitral or
administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings
or awards, policies, restraints, guidelines, or other legal requirements or determinations of an
arbitrator or of any Governmental Entity or any provisions of the foregoing, including general
principles of common and civil law and equity, binding on or affecting the Person (or any of
such Person’s Assets) referred to in the context in which such word is used; and “Law” means
any one of the foregoing.
“Lead Swap Arranger” means BMOsuch Lender as designated by the Borrower from
time to time, provided that such Lender has provided in its prior consent to the Borrower to act
in the capacity of Lead Swap Arranger.
“Lenders” means, collectively, the financial institutions and other Persons set forth on
the signature pages hereof as Lenders (and for greater certainty shall include the Hedge
Lenders, the Swingline Lender and the Fronting Letter of Credit Lenders, as applicable), and
any Eligible Assignee thereof upon such Eligible Assignee executing and delivering an
assignment and assumption agreement referred to in Section 17.01(2)(vi) to the Parent and the
Agent and in the singular any one of such Lenders, it being understood that for the purposes of
this Agreement, BMO Bank, N.A. shall constitute a Lender.
“Letter of Credit” means a letter of credit or a bank letter of guarantee issued or to be
issued by the Fronting Letter of Credit Lender for the account of a Borrower pursuant to Article
4 and in such form as the Fronting Letter of Credit Lender may from time to time approve.
“Letter of Credit Obligations” means, at any time, the sum of (a) an amount equal to the aggregate
undrawn and unexpired amount (including the amount to which any such Letters of Credit can be reinstated
pursuant to the terms hereof) of the then outstanding Letters of Credit and (b) an amount equal to the
aggregate drawn, but unreimbursed drawings on any Letters of Credit.
“Lien” means liens, charges, mortgages, pledges, security interests, hypothecs,
adverse claims, defects of title, deposit arrangements, deeds of trust, encumbrances or any
other similar rights of third parties relating to any Asset and any other similar lien of any kind
that in substance secures payment and performance of an obligation.
“Loan Document” or “Loan Documents” means this Agreement, the Guarantees, the
Pledge and Security Agreements, the other Security, the Eligible Hedging Agreements, the
Other Secured Agreements and all other documents, certificates, fee letters, instruments,
consents, waivers, estoppels, acknowledgments, notices, postponements, subordinations and
agreements to be executed and delivered to the Agent or the Lenders by any Loan Party as
contemplated hereunder and thereunder or any one or more of such documents and any other
document which is stated to be a Loan Document.
“Loan Parties” means, collectively, the Borrowers and the Guarantors, and “Loan
Party” means any one of them.
“Majority Lenders” or “Required Lenders” means, at any time, Lenders whose
Commitments, taken together, are at least 66 2/3% of the aggregate amount of the
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Commitments of all Lenders. If at any time the Commitments of the Lenders have been
cancelled, the Majority Lenders/Required Lenders shall mean Lenders whose Accommodations
Outstanding, taken together, are at least 66 2/3% of the aggregate amount of the
Accommodations Outstanding of all Lenders. For greater certainty, if at, any time, there are
only two (2) Lenders, the Majority Lenders/Required Lenders shall mean both Lenders. For
purposes of this definition, subject to Section 2.15(1)(i), any Defaulting Lender shall be
disregarded in determining the Majority Lenders/Required Lenders at any time.
“Management Services Agreement” means the intercompany administrative services
agreement dated as of January 1, 2022 between Tucows Inc. and the Service Recipients (as
defined therein).
“Margin Stock” means any “margin stock” as defined in Regulation T, U or X of the
FRB.
“Material Adverse Change” means any change or event which: (i) constitutes a
material adverse change in the business, operations, condition (financial or otherwise) or
properties of the Tucows Group on a Consolidated Basis; (ii) is reasonably likely to materially
impair the ability of the Loan Parties (taken as a whole) to timely and fully perform their
obligations under the Loan Documents; or (iii) is reasonably likely to materially impair the ability
of the Agent or the Lenders to enforce their rights and remedies under this Agreement or the
Security.
“Material Authorizations” means, collectively (i) the Authorizations specified in
Schedule 7.01(6); and (ii) any other Authorization of any Tucows Group Entity, the breach,
non-performance or cancellation of which or the failure of which to renew would reasonably be
expected to have a Material Adverse Change, and individually, any one of such Authorizations.
“Material Contracts” means, collectively (i) the Contracts specified in Schedule 7.01(13); and (ii) any other
Contract of any Tucows Group Entity the breach, non-performance or cancellation of which or the failure of
which to renew would reasonably be expected to have a Material Adverse Change, and individually, any one
of such Contracts.
“Material IP” means, as of any date of determination, Intellectual Property of the Loan
Parties that, individually or in the aggregate, is necessary in, or material to, the conduct of the
business of the Tucows Group, taken as a whole.
“Material Owned Real Property” means any owned real property of a Loan Party that
has a value in excess of $5,000,000.
“Maturity Date” means September 22July 27, 20272029.
“Maximum Lawful Rate” has the meaning specified in Section 3.05(1)(g).
“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral
consisting of cash or deposit account balances, an amount equal to 103% of (i) the Fronting
Exposure of all Fronting Letter of Credit Lenders with respect to Letters of Credit issued and
outstanding at such time, or (ii) in the case of Cash Collateral provided pursuant to Section
4.10(1), the Fronting Exposure required to be cash collateralized pursuant to such Section, and
(b) otherwise, an amount determined by the Agent and the Fronting Letter of Credit Lenders in
their reasonable discretion.
“Minor Title Defects” in respect of any parcel of real property means encroachments,
restrictions, easements, rights-of-way, servitudes and defects or irregularities in the title to such
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real property which are of a minor nature and which, in the aggregate, will not materially impair
the use of such land for the purposes for which such real property is held by the owner thereof.
“MNPI” has the meaning specified in Section 22.01(4).
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Mortgaged Property” has the meaning specified in Section 5.03.
“Multiemployer Plan” means a “multiemployer plan” as defined in Sections 3(37) and
4001(a)(3) of ERISA.
“Multiple Employer Plan” means a Plan which has two or more contributing sponsors
(including any Loan Party or any member of the Controlled Group) at least two of whom are not
under common control, as such a plan is described in Section 4064 of ERISA.
“National Flood Insurance Program” means the program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968 and the Flood Disaster
Protection Act of 1973, as revised by the National Flood Insurance Reform Act of 1994, that,
among other things, mandates the purchase of flood insurance to cover real property
improvements and contents located in Special Flood Hazard Areas in participating communities
and may provide protection to property owners through a federal insurance program.
“Net Proceeds” means any one or more of the following:
with respect to any Asset Sales by any Tucows Group Entity, the net amount equal to the aggregate amount
received in cash in connection with such Disposition (including, without limitation, the release of any amount
from an indemnity reserve, escrow or similar fund established in connection with such Disposition, but only as
and when received), less the sum of reasonable fees, including reasonable accounting, advisory (including
investment banking fees)
and legal fees, commissions and other out-of-pocket expenses, a provision of
taxes attributable to such Disposition and costs associated with the repayment of
Funded Debt (as evidenced by supporting documentation provided to the Agent)
or the unwinding of any hedge agreements incurred or paid for by any Tucows
Group Entity in connection with such Disposition;
(d)with respect to the receipt of proceeds under any insurance policy (other than
business interruption insurance or liability policy), the net amount equal to the
aggregate amount received (or receivable) in cash by any Tucows Group Entity
in connection with such insurance proceeds less a provision for taxes attributable
to such insurance proceeds;
(e)with respect to the issuance of any Equity Interests by any Person or of any
capital contributions by any Person in such Person, the net amount equal to the
aggregate amount received in cash in connection with such issuance or
contribution by any Person in such Person, less the sum of reasonable fees,
including reasonable accounting, advisory (including investment banking fees)
and legal fees, commissions and other out-of-pocket expenses and costs
associated with repayment of Funded Debt (as evidenced by supporting
documentation provided to the Agent) or the unwinding of any hedge
agreements incurred or paid for by such Person in connection with the issuance
of any such Equity Interests or of any capital contributions by any Person in such
Person; and
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(f)with respect to the incurrence of any Funded Debt by any Person, the net
amount equal to the aggregate amount received in cash in connection with such
incurrence by such Person, less the sum of reasonable fees, including
reasonable accounting, advisory (including investment banking fees) and legal
fees, commissions and other out-of-pocket expenses and costs associated with
repayment of any Funded Debt (as evidenced by supporting documentation
provided to the Agent) or the unwinding of any hedge agreements incurred or
paid for by such Person in connection with the of such Funded Debt by such
Person.
“New Commitments” shall have the meaning ascribed thereto in Section 2.03.
“Non-Consenting Lender” shall have the meaning ascribed thereto in Section 14.15.
“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender
at such time.
“NYFRB” means the Federal Reserve Bank of New York or any successor thereto.
“Order” means any binding order, judgment, injunction, decree, award or writ of any
court, tribunal, arbitrator or Governmental Entity.
“Other Connection Taxes” means, with respect to the Agent, any Lender or any other recipient of any
payment to be made by or on account of any obligation of any Tucows Group Entity hereunder or under any
Loan Document, Taxes imposed as a result of a present or former connection between such recipient and the
jurisdiction imposing such Tax (other than connections arising from such recipient having executed,
delivered, become a party to,
performed its obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any Loan Document,
or sold or assigned an interest in any Loan Document).
“Other Secured Agreements” means all agreements or arrangements (including
guarantees) entered into or made from time to time by any Tucows Group Entity in connection
with: (a) cash consolidation, cash management and credit card agreements and electronic fund
transfer arrangements between any Tucows Group Entity and the Agent or any Lender or any
Affiliate thereof (collectively, the “Service Lenders”), (b) daylight facility arrangements between
any Tucows Group Entity and any Service Lender, (c) bilateral letter of credit facilities provided
by one or more of the Lenders identified by the Borrowers to the Agent for purposes of this
clause (c) provided that the face amount of letters of credit outstanding thereunder does not
exceed U.S.$200,000 in the aggregate for all such bilateral credit facilities (including for
purposes thereof that certain facility letter dated March 3, 2020 between Tucows (Delaware)
Inc. and Royal Bank of Canada (formerly, HSBC Bank Canada) establishing a U.S.$100,000
letter of guarantee facility), until such time as the same are replaced by Letters of Credit issued
by the Fronting Letter of Credit Lender (d) any Eligible Hedging Agreement, and (e) other
transactions not made under this Agreement between any Tucows Group Entity and any
Service Lender if it is agreed pursuant to a written agreement signed by the Parent and the
Agent (and the Agent is acting on the instructions of all of the Lenders) that such debts,
liabilities and obligations shall be secured; and, for greater certainty, all such agreements and
arrangements entered into or made by any Tucows Group Entity with or in favour of any Person
at the time that such Person was an “Agent” or a “Lender” hereunder shall not cease to be an
Other Secured Agreement if such Person ceases to be an Agent or a Lender hereunder.
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“Other Secured Obligations” means, obligations owed by any Tucows Group Entity
respect of any Other Secured Agreements, excluding Excluded Swap Obligations.
“Other Taxes” means all present or future stamp or documentary taxes or any other
value-added, excise or property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document, except any such
Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an
assignment pursuant to a request by the Parent under Section 10.03(2)).
“Owned Intellectual Property” means, the Intellectual Property specified as such in
Schedule 7.01(22).
“Parent” means Tucows Inc., a Pennsylvania corporation.
“Participant” has the meaning specified in Section 17.01(4).
“Participant Register” has the meaning specified in Section 17.01(3).
“Patriot Act” has the meaning set out in Section 19.01(4).
“Payment Notice” has the meaning assigned to it in Section 14.12(2). “Payment Recipient” has the
meaning assigned to it in Section 14.12(1). “Payment Reduction Notice” has the meaning set out in
Section 2.08
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.
“Pension Benefit Plan” means at any time any “employee pension benefit plan” as
defined in Section 3(2) of ERISA (including a Multiple Employer Plan, but not a Multiemployer
Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards
under Sections 412, 430 or 436 of the Code and either (i) is maintained or to which
contributions are required by a Loan Party or any member of the Controlled Group or (ii) has at
any time within the preceding five (5) years been maintained or to which contributions have
been required by a Loan Party or any entity which was at such time a member of the Controlled
Group.
“Periodic Term CORRA Determination Day” has the meaning given to such term in
the definition of “Term CORRA”.
“Permitted Acquisition” means an Acquisition of Equity Interests in a Person (referred
to herein as a “share purchase”), or an Acquisition of assets of a Person (referred to herein as
an “asset purchase”), in either case if all of the following criteria are satisfied (except to the
extent as may be otherwise agreed in writing by the Majority Lenders in their discretion):
(a)the Majority Lenders in their discretion shall have provided their prior written
consent to such Acquisition after conducting such due diligence they may
consider appropriate in the circumstances within a reasonable period of time
prior to the closing of such Acquisition to permit the review thereof by the Agent
and the Lenders; provided however that the prior written consent of the Majority
Lenders shall not be required in connection with an Acquisition (hereinafter
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referred to as a “small Acquisition”) if (i) all other criteria listed in this definition
are satisfied in respect of such Acquisition; (ii) the purchase price for such
Acquisition plus the amount of any Funded Debt assumed in connection
therewith does not exceed $25,000,000 for each individual Acquisition; and (iii)
the aggregate purchase price for such Acquisition and all other small
Acquisitions previously completed in the same Financial Year plus the amount of
all Funded Debt assumed in connection therewith does not exceed $50,000,000
in each Financial Year;
(b)such Person is engaged in a business similar to one or more of the businesses
conducted by the Borrowers as at the date of this Agreement;
(c)the Acquisition does not involve a hostile or unsolicited take-over;
(d)the Acquisition shall be accretive to Adjusted EBITDA on a twelve-month pro
forma prospective basis, after giving effect to (i) normalization adjustments and
(ii) pro forma synergies reasonably expected to result from such Acquisition, in
each case as may be advised by Parent and approved by the Majority Lenders;
(e)in the case of a share purchase, immediately thereafter such Person will be a
Wholly-Owned Subsidiary of the Parent;
in the case of a share purchase (i) upon the completion of such Acquisition all Funded Debt (except Funded
Debt which will constitute Permitted Funded Debt hereunder) of such Person shall be repaid and the
holders of all Liens (except
Liens which will constitute Permitted Liens hereunder) affecting the assets of
such Person shall provide an undertaking to release and discharge such Liens
within thirty (30) days thereafter; and (ii) within thirty days following the
completion of such Acquisition all Liens (except Liens which will constitute
Permitted Liens hereunder) affecting the assets of such Person shall be released
and discharged and such Person shall provide a Guarantee and Security as may
be required pursuant to the terms hereof to be provided by a Subsidiary of the
Parent hereunder (including registrations, searches, legal opinions and ancillary
documentation);
(f)in the case of an asset purchase, (i) upon the completion of such Acquisition all
Funded Debt (except Funded Debt which will constitute Permitted Funded Debt
hereunder) secured by the acquired assets shall be repaid and the holders of all
Liens (except Liens which will constitute Permitted Liens hereunder) affecting
such assets shall provide an undertaking to release and discharge such Liens
within thirty (30) days thereafter; and (ii) within thirty (30) days following the
completion of such Acquisition all Liens (except Liens which will constitute
Permitted Liens hereunder) affecting such assets shall be released and
discharged and all Security required herein to be provided to the Agent in
respect of such assets (including registrations, searches, legal opinions and
ancillary documentation) shall be provided;
(g)the Acquisition does not involve the assumption of any material Environmental
Liabilities, and all representations and warranties contained herein with respect
to environmental matters shall be true and correct both immediately before and
immediately after such Acquisition;
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(h)the Loan Parties are in compliance with all applicable covenants and
representations and warranties in all material respects under this Agreement and
the other Loan Documents and will remain in compliance after giving effect to
such Acquisition; and no Default or Event of Default shall have occurred and be
continuing or would result from the completion of such Acquisition; and
(i)if any Tucows Group Entity proposes to incur Subordinated Debt to finance all or
any portion of such Acquisition, the terms and conditions of such Subordinated
Debt shall be satisfactory to the Majority Lenders, and the holder(s) of such
Subordinated Debt shall enter into a subordination and postponement agreement
with the Agent containing terms and conditions contemplated in the definition of
“Subordinated Debt” herein;
and provided further that if any such transaction would constitute both a Capital Expenditure
and a Permitted Acquisition, it shall be deemed to constitute a Permitted Acquisition and not a
Capital Expenditure.
“Permitted Funded Debt” means, without duplication: (i) the Accommodations Outstanding; (ii)
indebtedness of any Tucows Group Entity to any one or more other Tucows Group Entity; (iii) Subordinated
Debt; (iv) Funded Debt of any Tucows Group Entity secured by Permitted Liens; (v) the Verizon Liability and
other similar liabilities to other carriers in an aggregate amount not to exceed $7,500,000 at any time;prior to
renegotiation, termination or sale of the Verizon Agreement, (vi) obligations under any guarantees which are
considered to constitute Funded Debt, but only to the extent such guarantees are permitted pursuant to this
Agreement; (including, but not limited to, the Existing Parent Guarantees so long as same
remains unsecured at all times); (vii) Capitalized Lease Obligations in an aggregate amount not
to exceed $15,000,000 at any time; (viii) daylight loans incurred by any Tucows Group Entity to
any Lender for bona fide tax planning or cash management purposes; (ix) indebtedness of any
Person that becomes a subsidiary after the Closing Date; provided that (A) such indebtedness
exists at the time such person becomes a subsidiary and is not created in contemplation of, or
in connection with, such Person becoming a subsidiary and (B) the aggregate principal amount
of indebtedness permitted by this part (ix) shall not exceed $5,000,000 at any time outstanding;
(x) cash consolidation, cash management and credit card agreements and electronic fund
transfer arrangements outside of North America entered into by any Tucows Group Entity with
banks and financial institutions other than the Lenders and their respective Affiliates in an
amount not to exceed $1,000,000; and (xi) other indebtedness in an amount not to exceed
$2,500,000 at any time.
“Permitted Liens” means:
(a)Statutory Liens in respect of any amount which is not at the time overdue;
(b)Statutory Liens in respect of any amount which may be overdue but the validity
of which is being contested in good faith and in respect of which reserves have
been established in accordance with GAAP;
(c)Liens or rights of distress reserved in or exercisable under any lease for rent not
at the time overdue or for compliance with the terms of such lease not at the
time in default; and security deposits given under leases not in excess of six (6)
months’ rent;
(d)any obligations or duties affecting any real property due to any public utility or to
any municipality or government, or to any statutory or public authority, with
respect to any franchise, grant, licence or permit in good standing and any
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defects in title to structures or other facilities arising solely from the fact that such
structures or facilities are constructed or installed on real property under
government permits, leases or other grants in good standing; which obligations,
duties and defects in the aggregate do not materially impair the use of such
property, structures or facilities for the purpose for which they are held;
(e)Liens incurred or deposits of cash made or pledged to secure obligations under
workers’ compensation legislation or similar legislation, or in connection with
contracts, bids, tenders or expropriation proceedings, surety or appeal bonds,
costs of litigation when required by law, public and statutory obligations, and
warehousemen’s, storers’, repairers’, carriers’ and other similar Liens and
deposits;
(f)security given to a public utility or any municipality or government or to any
statutory or public authority to secure obligations incurred to such utility,
municipality, government or other authority in the ordinary course of business
and not at the time overdue;
Liens and privileges arising out of judgments or awards in respect of which: an appeal or proceeding for
review has been commenced; a stay of execution
pending such appeal or proceedings for review has been obtained; and reserves
have been established in accordance with GAAP;
(g)any Lien arising in connection with the construction or improvement of any real
property or arising out of the furnishing of materials or supplies therefor,
provided that such Lien secures moneys not at the time overdue (or if overdue,
the validity of which is being contested in good faith and in respect of which and
reserves have been established as reasonably required by the Majority Lenders),
notice of such Lien has not been given to the Agent or any Lender and such Lien
has not been registered against title to such real property;
(h)Minor Title Defects;
(i)Permitted Purchase-Money Obligations;
(j)Liens securing Capital Lease Obligations permitted hereunder provided such
Liens attach only to the assets (and proceeds therefrom) that are the subject
matter of such Capital Lease Obligations;
(k)the Security;
(l)Liens securing Subordinated Debt; and
(m)any other Liens on property not otherwise permitted by this definition so long as
neither (i) the aggregate principal amount of the indebtedness and other
obligations secured thereby nor (ii) the aggregate fair market value (determined
as of the date such Lien is incurred) of the assets subject thereto exceeds
$5,000,000 at any time outstanding;
provided that the use of the term “Permitted Liens” to describe the foregoing Liens shall mean
that such Liens are permitted to exist (whether in priority to or subsequent in priority to the
Security, as determined by Applicable Law); and for greater certainty such Liens shall not be
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entitled to priority over the Security by virtue of being described in this Agreement as “Permitted
Liens”.
“Permitted Purchase-Money Obligations” means Purchase Money Obligations
incurred or assumed in compliance with the provisions of this Agreement (for greater certainty,
including the restrictions relating to Capital Expenditures contained in Section 8.02) in
connection with the purchase, leasing or acquisition of capital equipment in the ordinary course
of business, provided that the aggregate amount of the Tucows Group liability thereunder is not
at any time greater than $1,000,000.
“Permitted Replacement” means the replacement of those directors who (a) have
died, (b) have been found to be of unsound mind, or (c) resigned not as a result of any
disagreement with any Tucows Group Entity on any matter relating to its operations, policies or
practices.
“Person” means a natural person, partnership, corporation, company, joint stock company, trust,
unincorporated association, joint venture or other entity or Governmental Entity, and pronouns that have a
similarly extended meaning.
“Plan(s)” means any employee benefit plan within the meaning of Section 3(3) of
ERISA, (including a Pension Benefit Plan and a Multiemployer Plan, as defined herein)
maintained for employees of any of the Loan Parties or any member of the Controlled Group or
any such Plan to which any Loan Party or any member of the Controlled Group is required to
contribute on behalf of any of its employees, but excluding any Canadian Pension Plan.
“Pledge and Security Agreement” has the meaning specified in Section 5.01(ii).
“PPSA” means the Personal Property Security Act (Ontario) as from time to time in
effect; provided, that if attachment, perfection or priority of the Agent’s security interests are
governed by the personal property security laws of any jurisdiction other than Ontario, “PPSA”
shall mean those personal property security laws in such other jurisdiction or, in the case of
Quebec, other applicable law governing security interest in personal property.
“Prime Rate” means the per annum rate of interest established from time to time by the
Agent as the reference rate of interest in effect at its principal office in Toronto for the
determination of interest rates that the Agent will charge for commercial loans in U.S. Dollars
made in (i) Canada in respect of the Canadian Borrower; and (ii) in the United States, in respect
of the U.S. Borrowers. The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. Each change in the Prime Rate shall
be effective from and including the date such change is publicly announced or quoted as being
effective.
“Public Lender” has the meaning specified in Section 22.01(4).
“Purchase Money Obligation” means, in respect of any Person, any Lien charging
property acquired by such Person, which is granted or assumed by such Person, reserved by
the transferor or which arises by operation of Law in favour of the transferor concurrently with
and for the purpose of the acquisition of such property, in each case where: (i) the principal
amount secured by such security interest is not in excess of the cost to such Person of the
property acquired and costs associated with such acquisition; and (ii) such security interest
extends only to the property acquired and the proceeds therefrom.
“RBSL” means Refinitiv Benchmark Services (UK) Limited or any successor thereto.
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“Register” has the meaning specified in Section 17.01(3).
“Related Party” means, with respect to any Person, such Person’s Affiliates and the
directors, officers, employees and agents of such Person and such Person’s Affiliates.
“Release” means, releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, migrating, escaping, leaching, disposing, dumping, depositing, spraying,
burying, abandoning, incinerating, seeping or placing, or any similar action defined in any
Environmental Law.
“Relevant Governmental Body” with respect to a Benchmark Replacement in respect
of Accommodations denominated in U.S. Dollars means the NYFRB or a committee officially
endorsed or convened by the NYFRB, or any successor thereto.
“Replacement Lender” has the meaning specified in Section 2.16.
“Reportable Compliance Event” means that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar charging
instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any
predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the
effect that it is reasonably likely that any aspect of its operations is in actual or probable
violation of any Anti-Terrorism Law.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK
Financial Institution, a UK Resolution Authority.
“Rolling Period” means each Financial Quarter taken together with the three (3)
immediately preceding Financial Quarters.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.
“Sale-Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement entered into after the Closing Date pursuant to which such Person (or one
or more of its Affiliates) transfers or causes the transfer of any Assets to another Person and
leases such Assets back from such Person.
“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law.
“Sanctioned Person” means any individual person, group, regime, entity or thing listed
or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person,
group, regime, entity or thing, or subject to any limitations or prohibitions (including but not
limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law,
including any Canadian Sanctioned Person.
“SEC” means the U.S. Securities and Exchange Commission, or any Governmental
Entity succeeding to any of its principal functions.
“Secured Obligations” has the meaning specified in Section 5.04.
“Secured Parties” means, collectively, the Agent, the Lenders, the Hedge Lenders and
the Service Lenders, and individually any one of them.
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“Security” has the meaning specified in Section 5.01.
“Service Lenders” has the meaning specified in the definition of “Other Secured
Agreements”.
“Share Repurchases” means purchases by the Parent of its issued and outstanding
Equity Interests.
“SOFR” means a rate equal to the secured overnight financing rate as administered by
the SOFR Administrator.
“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing
rate).
“SOFR Administrator’s Website” means the website of the NYFRB, currently at http://
www.newyorkfed.org, or any successor source for the secured overnight financing rate
identified as such by the SOFR Administrator from time to time.
“SOFR Determination Day” has the meaning set forth in the definition of “Daily Simple
SOFR”.
“SOFR Loan” means an Advance bearing interest based on (i) Adjusted Daily Simple
SOFR, or (ii) Adjusted Term SOFR, other than pursuant to clause (iii) of the definition of “Base
Rate (Canada)” or “Base Rate (United States)”, as applicable.
“SOFR Rate Day” has the meaning set forth in the definition of “Daily Simple SOFR”.
“Solvent” means, with respect to any Person on any date of determination, that on
such date (a) the fair value of the property (for the avoidance of doubt, calculated to include
goodwill and other intangibles) of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person, and (b) such Person is able to pay its debts and
liabilities as they mature. The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured liability.
“Special Flood Hazard Area” means an area that FEMA has designated as an area
subject to special flood hazards, the current standard for which is at least a one percent (1%)
chance of a flood equal to or exceeding the base flood elevation (a 100 year flood) in any given
year, as per the applicable flood maps.
“Standby Fee” has the meaning ascribed thereto in Section 2.13.
“Standby Fee Rate” means the interest rate per annum shown in the column titled
“Standby Fee Rate” in the pricing grid set forth in the definition of Applicable Margin.
“Statutory Lien” means a Lien in respect of any property or assets of any Tucows
Group Entity created by or arising pursuant to any applicable legislation in favour of any Person
(such as but not limited to a Governmental Entity), including, without limitation, a Lien for the
purpose of securing such Person’s obligation to deduct and remit employee source deductions
and goods and services tax pursuant to the Income Tax Act (Canada), the Excise Tax Act
(Canada), the Canada Pension Plan (Canada), the Employment Insurance Act (Canada) and
any legislation in any jurisdiction similar to or enacted in replacement of the foregoing from time
to time.
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“Subordinated Debt” means indebtedness of any Tucows Group Entity to any Person which the Majority
Lenders in their sole discretion have consented to in writing and in respect of which the holder thereof has
entered into a subordination and postponement agreement in favour of the Agent in form and substance
satisfactory to the Majority Lenders and registered in all places where necessary or desirable to protect the
priority of the Security, which shall provide (among other things) that: (i) the maturity date of such
indebtedness is later than the Maturity Date; (ii) the holder of such indebtedness may not receive any
payments on account of principal or interest thereon (except to the extent, if any, expressly permitted therein);
(iii) any security held in respect of such indebtedness is subordinated to the Security; (iv) the holder of such
indebtedness may not take any enforcement action in respect of any such security (except to the extent, if
any, otherwise expressly provided therein) without the prior written consent of
the Agent; and (v) any enforcement action taken by the holder of such indebtedness will not
interfere with the enforcement action (if any) being taken by the Agent in respect of the
Security.
“Subsidiary” or “subsidiary” means, in respect of any Person, (i) any corporation or
company of which at least a majority of the outstanding securities having by the terms thereof
ordinary voting power to elect a majority of the board of directors of such corporation or
company is at the time directly, indirectly or beneficially owned or controlled by the Person, or
one or more of its subsidiaries, or the Person and one or more of its subsidiaries; (ii) any
partnership of which, at the time, the Person, or one or more of its subsidiaries, or the Person
and one or more of its subsidiaries directly, indirectly or beneficially own or control at least a
majority of the voting interests (however designated) thereof, or otherwise control such
partnership; and (iii) any other Person of which at least a majority of the voting interests
(however designated) are at the time directly, indirectly or beneficially owned or controlled by
the Person, or one or more of its subsidiaries, or the Person and one or more of its subsidiaries.
“Swap Obligation” means any obligation to pay or perform under any agreement,
contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the
Commodity Exchange Act (United States).
“Swingline Advance” means a Canadian Prime Rate Advance, a Base Rate (Canada)
Advance or a Base Rate (United States) Advance, as applicable, made to a Borrower, in each
case by the Swingline Lender pursuant to ARTICLE 3; provided that, for the purposes of
determining the applicable Canadian Prime Rate, Base Rate (Canada) or a Base Rate (United
States) applicable to such Advance, the definitions thereof shall be read with reference to the
“Swingline Lender” instead of the “Agent”.
“Swingline Commitment” means $10,000,000 in the aggregate and for greater
certainty, the Swingline Commitment forms part of the Commitment. The Swingline
Commitment of each Swingline Lender shall be in an amount as agreed by such Swingline
Lender, the Agent and the Borrowers from time to time, and SCHEDULE 8 hereto shall be
automatically amended to reflect such Swingline Commitment amount upon such agreement;
provided that the Swingline Commitment may be reallocated no more than two (2) times in any
Financial Quarter, unless otherwise agreed by the Agent. For the avoidance of doubt, the
Swingline Commitments of all Swingline Lenders shall not exceed $10,000,000 in the
aggregate.
“Swingline Lender” means BMO, and any other Lender that may be agreed between
such Lender, the Agent and the Borrowers from time to time. Each reference to “the Swingline
Lender” herein shall be deemed to refer to “each Swingline Lender” or “the applicable Swingline
Lender, as the case may be”, as applicable.
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“Tax” and “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all
income, sales, use, goods and services, harmonized sales, value added, capital, capital gains, alternative,
net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property
taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax,
including Canada Pension Plan and provincial pension plan contributions, employment insurance payments
and workers’ compensation premiums, together with any instalments with respect thereto, and any
interest, fines and penalties with respect thereto, imposed by any taxing authority (including
federal, state, provincial, municipal and foreign taxing authority).
“Term CORRA Administrator” means Candeal Benchmark Administration Services
Inc., TSX Inc., or any successor administrator.
“Term CORRA” means, for any calculation with respect to a Term CORRA Loan, the
Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the
day (such day, the “Periodic Term CORRA Determination Day”) that is two (2) Business Days
prior to the first day of such Interest Period, as such rate is published by the Term CORRA
Administrator; provided, however, that if as of 1:00 p.m. (Toronto time) on any Periodic Term
CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not
been published by the Term CORRA Administrator and a Canadian Benchmark Replacement
Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will
be the Term CORRA Reference Rate for such tenor as published by the Term CORRA
Administrator on the first preceding Business Day for which such Term CORRA Reference
Rate for such tenor was published by the Term CORRA Administrator so long as such first
preceding Business Day is not more than three (3) Business Days prior to such Periodic Term
CORRA Determination Day.
“Term CORRA Loan” means an Advance made pursuant to this Agreement that bears
interest at a rate based on Adjusted Term CORRA.
“Term CORRA Reference Rate” means the forward-looking term rate based on
CORRA.
“Term SOFR” means, for the applicable tenor, the Term SOFR Reference Rate on the
day (such day, the “Term SOFR Determination Day”) that is two (2) U.S. Government
Securities Business Days prior to (a) in the case of SOFR Loans, the first day of such
applicable Interest Period, or (b) with respect to Base Rate (Canada) or Base Rate (United
States), as applicable, such day of determination of the Base Rate (Canada) or Base Rate
(United States), as applicable, in each case as such rate is published by the Term SOFR
Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Term
SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not
been published by the Term SOFR Administrator and a Benchmark Replacement Date with
respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term
SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first
preceding U.S. Government Securities Business Day for which such Term SOFR Reference
Rate for such tenor was published by the Term SOFR Administrator so long as such first
preceding U.S. Government Securities Business Day is not more than three (3) U.S.
Government Securities Business Days prior to such Term SOFR Determination Day.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited
(CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Agent
in its reasonable discretion).
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“Term SOFR Reference Rate” means the per annum forward-looking term rate based
on SOFR.
“Terminated Lender” shall have the meaning ascribed thereto in Section 14.15.
“Third Amendment Effective Date” means July 27, 2026.
“Ting Fiber Investment” means the Investment to be made by Tucows Inc. into Ting
Fiber Group Entities in the amount of up to USD[***] including intercompany debt owing from
Ting Fiber Group Entities to Tucows Inc., provided that, up to USD$[***] of such Investment
may be paid directly by Tucows Inc. to Generate TF Holdings, LLC.
“Ting Fiber Group” means, collectively, each of the following entities: Tucows Fiber,
Inc., a Delaware corporation, Ting Fiber, LLC, a Delaware limited liability company, Ting
Telecom California LLC, a Delaware limited liability company, Navigator Network Services, LLC,
a Virginia limited liability company, Ting Holdco LLC, a Delaware limited liability company, Blue
Ridge Websoft, LLC, a Virginia limited liability company, Ting Issuer LLC, a Delaware limited
liability company, Simply Bits, LLC, a Delaware limited liability company, Ting Virginia, LLC, a
Delaware limited liability company, Ting Internet LLC, a Delaware limited liability company,
Cedar Holdings Group, LLC, a Delaware limited liability company, Fiber Roads, LLC, a
Delaware limited liability company, Zippytech, LLC, a Delaware limited liability company, and
Zippytech of New Mexico LLC, a Delaware limited liability company, and Ting Network Cabling
LLC, a California LLC and each a “Ting Fiber Group Entity”.
“Ting Fiber Group Sale” means the sale of (i) certain issued and outstanding shares of
certain Ting Fiber Group Entities held by certain Loan Parties and Tucows Group Entities or (ii)
all or substantially all of the assets of certain Ting Fiber Group Entities, in either case, pursuant
to the Ting Fiber Group Sale Purchase Documents.
“Ting Fiber Group Sale Purchase Documents” means those certain agreements of
purchase and sale provided to the Agent upon completion of the Ting Fiber Group Sale.
“Total Funded Debt” means, any time, the Funded Debt of the Tucows Group on a
Consolidated Basis, specifically including for greater certainty the Accommodations
Outstanding, Subordinated Debt, the Verizon Liability and other similar liabilities to other
carriers at such time.
“Total Funded Debt to Adjusted EBITDA Ratio” means, at any time, the ratio of (i)
Total Funded Debt at such time less cash or Cash Equivalents of the Tucows Group in an
aggregate amount of not more than $7,500,000 on deposit with the Agent or one or more of the
Lenders in respect of which the Agent (for the benefit of itself and the other Secured Parties)
has a first priority Lien; to (ii) Adjusted EBITDA for the relevant Rolling Period in respect of
which the Parent has delivered a Compliance Certificate hereunder.
“Tucows Group” means, collectively, the Borrowers, the Guarantors and each of the
following entities: Infonautics Corporation, a Pennsylvania corporation, Tucows Domains Inc.,
an Ontario corporation, eNom Canada Corp., a Nova Scotia corporation, Whois Privacy
Protection Services, Inc., a Nevada corporation, Secure Business Services, Inc., a Nevada
corporation, Contact Privacy Inc., an Ontario corporation, Tucows (Australia) Pty Limited, an
Australian private company, Tucows (UK) Limited, a United Kingdom private limited company,
and EPAG Domainservices Gmbh, a Germany private limited company, and each a “Tucows
Group Entity”.
“Type”  has  the meaning  specified  in the definition of  “Accommodation”  or
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“Advance”, as the case may be, herein.
“UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if the
applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial
Code as in effect from time to time in the State of New York.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined
under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook
(as amended from time to time) promulgated by the United Kingdom Financial Conduct
Authority, which includes certain credit institutions and investment firms, and certain affiliates of
such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public
administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the applicable Benchmark
Replacement excluding the related Benchmark Replacement Adjustment.
“Unadjusted Canadian Benchmark Replacement” means the applicable Canadian
Benchmark Replacement excluding the related Canadian Benchmark Replacement Adjustment.
“U.S. Borrowers” means, Tucows (Delaware) Inc., a Delaware corporation, Wavelo,
Inc., a Delaware corporation, Ting Inc., a Delaware corporation, Tucows (Emerald), LLC, a
Delaware limited liability company, the Parent, and individually any one of them a “U.S.
Borrower”, and in each case, their successors and permitted assigns.
“U.S. Dollars” and “U.S.$” and “$” means lawful money of the United States of
America.
“U.S. Government Securities Business Day” means any day except for (i) a
Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets
Association recommends that the fixed income departments of its members be closed for the
entire day for purposes of trading in United States government securities.
“Verizon Agreement” means the Wholesale Agreement between Ting Inc. and Cellco
Partnership d/b/a Verizon Wireless dated July 2, 2019, (as amended, restated, supplemented
or replaced).
“Verizon Liability” means, at any time, the actual amount expensed by Ting Inc. and/or
the other Loan Parties at such time to Cellco Partnership d/b/a Verizon Wireless pursuant to the
Verizon Agreement (for greater certainty, after deduction of the cumulative amount spent by Ting
Inc. and/or the other Loan Parties on network services thereunder) as determined in accordance
with the Verizon Agreement.
“Wavelo Stock Option Plan” means the “2022 Equity Compensation Plan” of Wavelo,
Inc. effective September 23, 2022, a full, true complete copy of which has been provided to the
Agent and the Lenders.
“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.
“Wholly-Owned Subsidiary” means, in respect of any Person, at any time, any Subsidiary, 100% of all of
the equity interests (except directors’ qualifying shares) and voting interests of which issued and
outstanding shares of the capital stock of, or in the case of a
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partnership or any other legal entity, where all of the outstanding partnership or other ownership
interests, are owned by the Person or one or more of the Person and the Person’s other
Wholly-Owned Subsidiaries at such time.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member Country, which
write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and
(b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under
the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK
Financial Institution or any contract or instrument under which that liability arises, to convert all
or part of that liability into shares, securities or obligations of that person or any other person, to
provide that any such contract or instrument is to have effect as if a right had been exercised
under it or to suspend any obligation in respect of that liability or any of the powers under that
Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.02Gender and Number.
Any reference in the Loan Documents to gender includes all genders, and words
importing the singular number only include the plural and vice versa.
Section 1.03Interpretation not Affected by Headings, etc.
The provisions of a table of contents, the division of this Agreement into Articles and
Sections and the insertion of headings are for convenience of reference only and shall not
affect the interpretation of this Agreement.
Section 1.04Currency.
All references in this Agreement and the Loan Documents to dollars or $, unless
otherwise specifically indicated, are expressed in United States Dollars.
Section 1.05Certain Phrases, etc.
In any Loan Document (i) (A) the words “including” and “includes” mean “including (or
includes) without limitation” and (B) the phrase “the aggregate of”, “the total of”, “the sum of”, or
a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”,
and (ii) in the computation of periods of time from a specified date to a later specified date,
unless otherwise expressly stated, the word “from” means “from and including” and the words
“to” and “until” each mean “to (or until) but excluding”.
Section 1.06Time of the Essence.
Time is of the essence of this Agreement.
Section 1.07Accounting Terms.
All accounting terms not specifically defined in this Agreement shall be interpreted in accordance with GAAP.
If any accounting changes occur and such changes result in a material change in the calculation of the
financial covenants, standards or terms used in this Agreement or any other Loan Document (other than
Eligible Hedging Agreements or Other Secured Agreements), then the Parent, the Agent and the Lenders
agree to enter into negotiations in
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order to amend such provisions of this Agreement or such Loan Document, as applicable, so as
to equitably reflect such accounting changes with the desired result that the criteria for
evaluating the Parent’s financial condition shall be the same after such accounting changes as
if such accounting changes had not been made; provided, however, that the agreement of the
Majority Lenders to any required amendments of such provisions shall be sufficient to bind all
Lenders. If the Parent and the Majority Lenders agree upon the required amendments, then
after appropriate amendments have been executed and the underlying accounting change with
respect thereto has been implemented, any reference to GAAP contained in this Agreement or
in any other Loan Document (other than Eligible Hedging Agreements or Other Secured
Agreements) shall, only to the extent of such accounting change, refer to GAAP, consistently
applied after giving effect to the implementation of such accounting change. If the Parent and
the Majority Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any accounting change, then all calculations of financial
covenants and other standards and terms in this Agreement and the other Loan Documents
shall continue to be prepared, delivered and made without regard to the underlying accounting
change. In such case, the Parent shall, in connection with the delivery of any financial
statements under this Agreement, provide a management prepared reconciliation of the
financial covenants to such financial statements in light of such accounting changes. To the
extent that the Parent shall deliver any financial statements hereunder which contain amounts
in any currency other than Canadian Dollars in respect of any period, for the purposes of
determining compliance with the standards and terms in this Agreement and the other Loan
Documents which are denominated in Canadian Dollars figures, such amounts will be
converted into Canadian Dollars based upon the average of the Bank of Canada noon spot rate
(or other rate determined by the Agent if such spot rate is not available) for the applicable
period, unless expressly stated otherwise. In addition, all obligations of the Loan Parties and
their Subsidiaries that are or would have been treated as operating leases for purposes of IFRS
prior to the effectiveness of FASB ASC 842 may continue to be accounted for as operating
leases for purposes of all financial definitions and calculations for purpose of this Agreement
(whether or not such operating lease obligations were in effect on such date) notwithstanding
the fact that such obligations are required in accordance with FASB ASC 842 (on a prospective
or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial
statements.
Section 1.08Non-Business Days.
Except as otherwise specified herein, in any Loan Document, whenever any payment,
report, notice or other deliverable is stated to be due on a day which is not a Business Day,
such payment, report, notice or other deliverable shall be deemed to be due on the next
succeeding Business Day (for greater certainty, it being understood that any applicable interest
and Fees shall accrue in respect of such succeeding Business Day and shall be added to the
next payment of interest and Fees required to be made hereunder).
Section 1.09Incorporation of Schedules.
The schedules attached to this Agreement shall, for all purposes of this Agreement,
form an integral part of it.
Section 1.10Reference to Agent or Lenders.
Any reference in any Loan Document to the Agent or a Lender shall be construed so as
to include its permitted successors, transferees or assigns hereunder in such capacity, in
accordance with their respective interests.
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Section 1.11References to Time of Day.
Except as otherwise specified herein, a time of day shall be construed as a reference to
Toronto, Canada time.
Section 1.12References to Applicable Laws.
Except as otherwise provided herein, any reference in any Loan Document to Laws shall
be construed to be a reference to such Laws as the same may have been, or may from time to
time be, enacted, promulgated, amended, reformed or otherwise modified or re-enacted from
time to time.
Section 1.13References to Agreements.
Except as otherwise provided herein, any reference in any Loan Document to this
Agreement, any other Loan Document or any other agreement or document shall be construed
to be a reference to this Agreement, such Loan Document or such other agreement or
document, as the case may be, as the same may have been, or may from time to time be,
amended, varied, restated, supplemented or otherwise modified in accordance with the terms
herein or therein (if applicable).
Section 1.14Rateable Portion of Accommodations.
References in this Agreement to a Lender’s rateable portion or pro rata share of
Commitments or Accommodations or rateable share of payments of principal, interest, Fees or
any other amount, shall mean and refer to a rateable portion or share as nearly as may be
rateable in the circumstances, as determined in good faith by the Agent. Each such
determination by the Agent shall be prima facie evidence of such rateable share.
Section 1.15Quebec Matters.
(1)For purposes of any assets, liabilities or entities located in the Province of Québec
and for all other purposes pursuant to which the interpretation or construction of this Agreement
may be subject to the laws of the Province of Québec or a court or tribunal exercising
jurisdiction in the Province of Québec, (a) “personal property” shall include “movable property”,
(b) “real property” or “real estate” shall include “immovable property”, (c) “tangible property”
shall include “corporeal property”, (d) “intangible property” shall include “incorporeal property”,
(e) “security interest”, “mortgage”, “charge” and “lien” shall include a “hypothec”, “right of retention”, “prior
claim” and a resolutory clause, (f) all references to filing, perfection, priority, remedies, registering or
recording under the Uniform Commercial Code or a Personal Property Security Act shall include publication
under the Civil Code of Québec, (g) all references to “bailor” and “bailee” shall include references to
“depositor” and “depositary”, (h) all references to “perfection” of or “perfected” liens or security interest shall
include a reference to an “opposable” or “set up” lien or security interest as against third parties, (i) any “right
of offset”, “right of set-off” or similar expression shall include a “right of compensation”, (j) “goods” shall
include “corporeal movable property” other than chattel paper, documents of title, instruments, money and
securities, (k) an “agent” shall include a “mandatary”, (l) construction liens or similar
liens shall include “legal hypothecs”; (m) “joint and several” shall include “solidary”; (n) “gross
negligence or wilful misconduct” shall be deemed to be “intentional or gross fault”; (o)
“beneficial ownership” shall include “ownership on behalf of another as mandatary”; (p)
“easement” shall include “servitude”; (q) “priority” shall include “prior claim”; (r) “survey” shall
include “certificate of location and plan”; (s) “state” shall include “province”; (t) “accounts” shall
include “claims”. The parties hereto confirm that it is their wish that this Agreement and any
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other document executed in connection with the transactions contemplated herein be drawn up
in the English language only and that all other documents contemplated thereunder or relating
thereto, including notices, may also be drawn up in the English language only. Les parties aux
présentes confirment que c’est leur volonté que cette convention et les autres documents de
crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous
avis, envisagés par cette convention et les autres documents peuvent être rédigés en langue
anglaise seulement.
(2)For the purposes of the grant of security under the laws of the Province of Québec
which may now or in the future be required to be provided by any of the Loan Parties, the Agent
is hereby irrevocably authorized and appointed to act as the hypothecary representative (within
the meaning of Article 2692 of the Civil Code of Québec) for all Lenders in order to hold each
hypothec granted under the laws of the Province of Quebec pursuant to any deed of hypothec
as security for the Secured Obligations and to exercise such rights and duties as are conferred
upon the hypothecary representative under each such deed of hypothec and applicable laws
(with the power to delegate any such rights or duties). The execution prior to the date hereof by
the Agent of any deed of hypothec contemplated above, is hereby ratified and confirmed. For
greater certainty, the Agent, acting in its capacity as hypothecary representative, shall have the
same rights, powers, immunities, indemnities and exclusions from liability as are prescribed in
favour of the Agent herein, which shall apply mutatis mutandis. In the event of the resignation
and appointment of a successor Agent, such successor Agent shall also act as the successor
hypothecary representative for all Lenders without any further action or formality being required
to effect such appointment. Notwithstanding Section 19.01, this provision shall be governed and
construed in accordance with the laws of the Province of Québec.
Section 1.16Permitted Liens.
Any reference in any of the Loan Documents to a Permitted Lien is not intended to
subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any
agreement to subordinate or postpone, any Lien created by any of the Loan Documents to any
Permitted Lien.
Section 1.17Interest Rates
The Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the
continuation of, administration of, submission of, calculation of or any other matter related to the Base Rate
(Canada), Base Rate (United States), Term SOFR Reference Rate, Daily Simple SOFR, Term SOFR, SOFR,
Adjusted Term SOFR, Adjusted Daily Simple SOFR, CORRA, Daily Compounded CORRA, or Term CORRA,
or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor
or replacement rate thereto (including any Benchmark Replacement or Canadian Benchmark Replacement),
including whether the composition or characteristics of any such alternative, successor or replacement rate
(including any Benchmark Replacement or Canadian Benchmark Replacement) will be similar to, or produce
the same value or economic equivalence of, or have the same volume or liquidity as the Base Rate
(Canada), Base Rate
(United States), Term SOFR Reference Rate, Daily Simple SOFR, Term SOFR, SOFR,
Adjusted Term SOFR, Adjusted Daily Simple SOFR, CORRA, Daily Compounded CORRA, or
Term CORRA or any other Benchmark prior to its discontinuance or unavailability, or (b) the
effect, implementation or composition of any Conforming Changes or Canadian Benchmark
Replacement Conforming Changes. The Agent and its Affiliates or other related entities may
engage in transactions that affect the calculation of the Base Rate (Canada), Base Rate (United
States), Term SOFR Reference Rate, Daily Simple SOFR, Term SOFR, SOFR, Adjusted Term
SOFR, Adjusted Daily Simple SOFR, CORRA, Daily Compounded CORRA, or Term CORRA or
any alternative, successor or replacement rate (including any Benchmark Replacement or
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Canadian Benchmark Replacement) or any relevant adjustments thereto, in each case, in a
manner adverse to the Borrower. The Agent may select information sources or services in its
reasonable discretion to ascertain the Base Rate (Canada), Base Rate (United States), Term
SOFR Reference Rate, Daily Simple SOFR, Term SOFR, SOFR, Adjusted Term SOFR,
Adjusted Daily Simple SOFR, CORRA, Daily Compounded CORRA, or Term CORRA or any
other Benchmark or Canadian Benchmark, in each case pursuant to the terms of this
Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity
for damages of any kind, including direct or indirect, special, punitive, incidental or
consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and
whether at law or in equity), for any error or calculation of any such rate (or component thereof)
provided by any such information source or service.
Section 1.18Joint and Several Obligations.
(1)All obligations hereunder which are stated to be obligations of any Borrower to the
Lenders shall, to the extent permitted by Applicable Law, be joint and several obligations of the
Borrowers. The obligation of any Borrower with respect to its joint and several liability for the
credit extended to any other Borrower shall not be wholly or partially satisfied by such first
mentioned Borrower repaying the credit extended to such first mentioned Borrower hereunder.
The Lenders shall not be bound to exhaust their recourse against any of the Borrowers or any
security or guarantees they may at any time hold before being entitled to payment from any
other Borrower and each Borrower renounces all benefits of discussion and division.
(2)In addition to all such rights of indemnity and subrogation as the Borrowers may
have under Applicable Law, in the event a payment shall be made by a Borrower (the
“Claiming Borrower”) in respect of credit extended to the other Borrower (the “Borrowing
Borrower”) as a result of the Claiming Borrower’s joint and several liability hereunder, the
Borrowing Borrower shall indemnify the Claiming Borrower for the full amount of such payment
and, subject to clause (c) below, the Claiming Borrower shall be subrogated to the rights of the
person to whom such payment shall have been made to the extent of such payment.
None of the Borrowers shall exercise any rights which it may acquire by way of indemnity, subrogation or
contribution by reason of its joint and several liability hereunder, by any payment made hereunder or
otherwise, until the prior repayment in full of all outstanding credit hereunder. Any amount paid to a Borrower
on account of any such rights prior to the repayment in full of all outstanding credit hereunder shall be held in
trust for the benefit of the Lenders and shall immediately be paid to the Agent for the account of the Lenders,
and credited and applied against outstanding credit hereunder, whether matured or unmatured, in
accordance with the terms hereof.
ARTICLE 2
CREDIT FACILITY
Section 2.01Availability.
(1)Each Lender individually, and not jointly and severally, agrees, on the terms and
conditions of this Agreement, to make Accommodations in (i) Canadian Dollars and U.S.
Dollars to the Canadian Borrower; and (ii) in U.S. Dollars to the U.S. Borrowers, in a maximum
aggregate amount equal to such Lender’s Commitment. The Fronting Letter of Credit Lender
agrees, in accordance with the terms and conditions of this Agreement, to make Letters of
Credit available to the Borrowers up to the amount of the Fronting Letter of Credit Lender’s
Fronting Letter of Credit Commitment. The Swingline Lender agrees, on the terms and
conditions of this Agreement, to make Swingline Advances to the Borrowers in a maximum
amount equal to the Swingline Commitment. The failure of any Lender to make an
Accommodation shall not relieve any other Lender of its obligation, if any, in connection with
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any Accommodation, but no Lender is responsible for any other Lender’s failure in respect of
such Accommodation. The Agent shall give each applicable Lender prompt notice of any
Accommodation Notice received from a Borrower and of each applicable Lender’s rateable
portion of any Accommodation.
(2)Accommodations shall be made available by the Lenders to (i) the Canadian
Borrower as Canadian Prime Rate Advances, Term CORRA Loans, Daily Compounded
CORRA Loans, Base Rate (Canada) Advances and SOFR Loans; and (ii) the U.S. Borrowers
as SOFR Loans and Base Rate (United States) Advances. Accommodations by the Swingline
Lender shall be made available as Swingline Advances pursuant to Article 3. Accommodations
by the Fronting Letter of Credit Lender shall be made available as Letters of Credit pursuant to
Article 4.
Section 2.02Commitments and Facility Limits.
(1)The Accommodations Outstanding under the Credit Facility shall not at any time
exceed the Commitment. The Accommodations Outstanding under the Credit Facility to each
Lender shall not at any time exceed such Lender’s Commitment. The sum of the principal
amount of all Swingline Advances shall not at any time exceed the Swingline Commitment. The
Face Amount of Letters of Credit outstanding at any time shall not exceed $8,000,000.
(2)The Credit Facility shall revolve and no payment or prepayment or repayment
under the Credit Facility shall reduce the Commitment thereunder unless expressly otherwise
provided for herein.
(3)The Credit Facility shall be available in one or more Accommodations from and
after the Closing Date and from time to time prior to the Maturity Date.
Section 2.03Credit Facility Accordion
The Borrowers may, at any time that the Total Funded Debt to Adjusted EBITDA Ratio is less than 3.75:1,
request an increase to the Commitment, inclusive of the Swingline Commitment by sixty (60) days prior
written notice to the Agent (the “Accordion Notice”) by up to $60,000,000.00 in the aggregate at any time,
subject to a minimum amount of $10,000,000 for each request, on or before the Maturity Date, to the extent
the Agent has received binding
commitments from existing Lenders and/or from new Lenders mutually acceptable to the Agent
and the Borrowers for the entire amount requested (the “New Commitments”), provided that:
(i)no Event of Default has occurred that is continuing on the date such
Accordion Notice is given or on the Accordion Effective Date, nor would
any Event of Default result after giving effect to the requested increase;
(ii)no commitment of any Lender shall be increased without the written
consent of such Lender;
(iii)the New Commitments of the Lenders shall be effected pursuant to an
amendment to this Agreement in form and substance acceptable to the
Agent executed and delivered by the Borrowers, the other Loan parties,
the Lenders and the Agent;
(iv)the Borrowers shall deliver or cause to be delivered any legal opinions or
other documents reasonably requested by the Agent in connection with
such increase; and
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(v)the Borrowers shall pay to the Agent a fee to be mutually agreed at the
time the Accordion Notice is delivered.
(1)The Agent shall notify the Loan Parties and the Lenders on or before the
Accordion Effective Date of each increase in Commitments arising pursuant to
Section 2.03(1), together with an updated SCHEDULE 8 giving effect to such
increase. Any increase shall be available to the Borrowers commencing on the
Accordion Effective Date and continuing until the Maturity Date. Once the
Borrowers request an increase and it has been approved by the Agent, such
increase shall remain in effect until the Maturity Date unless otherwise cancelled
pursuant hereto. For greater certainty, the Borrowers can withdraw a request
under Section 2.03(1) for an increase until the Accordion Effective Date of the
applicable increase.
(2)On each Accordion Effective Date, the Agent shall determine and notify the
Lenders the amount of adjusting payments that may need to be made amongst
the Lenders to ensure that their respective shares in outstanding advances
under the Credit Facility, as applicable, equal their respective pro rata share of
the Credit Facility, as applicable, based upon their respective Commitments.
Each applicable Lender under the Credit Facility shall advance to the Agent the
amount of any such adjusting payment so required of it based on the New
Commitments and the Agent shall, upon receipt, advance to each other Lender
the amount of the corresponding adjusting payment required to be paid to it as
determined above. The Borrowers shall be obliged to repay outstanding
advances under the Credit Facility, as applicable, amongst the Lenders as
adjusted pursuant to this Section 2.03(3).
Section 2.04Use of Proceeds.
The Borrowers shall use the proceeds of Accommodations under the Credit Facility: (i) to refinance existing
indebtedness, (ii) for general corporate purposes, including, but not limited to, financing working capital
requirements, and (iii) to finance Share Repurchases (in
accordance with the terms of this Agreement), Capital Expenditures and Permitted Acquisitions.
, (iv) to finance the Data Centre Purchase Transaction in accordance with the terms of this
Agreement, and (v) to finance the Ting Fiber Investment. The Borrowers shall only request
Accommodations under the Credit Facility when the funds are intended to be used and will in
fact be used strictly for the specific and legitimate business purposes described in this Section
2.04 within thirty (30) days from the date of such Advance and the Borrowers shall not seek
Accommodations under the Credit Facility should they have cash on hand in an amount
sufficient to pay such costs and expenses.
Section 2.05Mandatory Repayments.
(1)The Borrowers shall repay (subject as otherwise provided in this Agreement) the
Accommodations Outstanding under the Credit Facility to the Agent on behalf of each Lender
(and the Commitment shall be permanently cancelled) on the Maturity Date, together with all
accrued interest and Fees and all other amounts payable to the Lenders in connection with the
Credit Facility. On the Maturity Date, the Borrowers shall deliver to the Fronting Letter of Credit
Lender (or cause to be delivered to the Fronting Letter of Credit Lender) originals of each
unexpired Letter of Credit issued by the Fronting Letter of Credit Lender or Cash Collateral or a
letter of credit (on terms and conditions satisfactory to the Fronting Letter of Credit Lender) in
lieu thereof.
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Section 2.06Mandatory Prepayments.
(1)An amount equal to 100% of the Net Proceeds from any Asset Sale by any
Tucows Group Entity in excess of $12,500,000 (or the Equivalent Amount in any other
currency) in any Financial Year (whether individually or in aggregate and taking into account
any proceeds received in another currency at the Equivalent Amount at the time such proceeds
are received) shall be applied to the repayment of Accommodations Outstanding under the
Credit Facility (and the Commitment shall be permanently reduced by an amount by which the
Net Proceeds of such Disposition exceed $12,500,000), except to the extent that the Net
Proceeds from such Disposition of Assets are reinvested (other than in cash or Cash
Equivalents) or used in the Business by any Tucows Group Entity within 180 days of the date of
such Asset Sale.
(2)An amount equal to 100% of the Net Proceeds from the issuance of any Equity
Interests (other than the Net Proceeds of an Excluded Equity Issuance) by the Parent shall be
applied forthwith upon receipt by or on behalf of any Tucows Group Entity to the repayment of
Accommodations Outstanding under the Credit Facility (and the Commitment shall be
permanently reduced by the amount of such Net Proceeds). For the purposes hereof “Net
Proceeds of an Excluded Equity Issuance” means the Net Proceeds of the issuance of any
Equity Interest which are used to fund a Permitted Acquisition or Capital Expenditures permitted
hereunder.
(3)An amount equal to 100% of the Net Proceeds from the incurrence of any Funded
Debt by any Tucows Group Entity, other than Funded Debt permitted by Section 8.02(1), shall
be applied forthwith upon receipt by or on behalf of any Tucows Group Entity to the repayment
of Accommodations Outstanding under the Credit Facility (and the Commitment shall be
permanently reduced by the amount of such Net Proceeds).
An amount equal to 100% of the Net Proceeds of any insurance maintained by any Tucows Group Entity
(other than business interruption insurance) received by any Tucows
Group Entity in an amount in excess of $1,000,000 on account of each separate loss, damage
or injury shall be applied forthwith upon receipt thereof, to the repayment of Accommodations
Outstanding under the Credit Facility (and the Commitment shall be permanently reduced by an
amount of such Net Proceeds) except to the extent (i) such Net Proceeds shall have been
expended by a Tucows Group Entity for the repair or replacement of the affected property
within 180 days of receipt of such Net Proceeds and the Parent shall have furnished to the
Agent evidence satisfactory to the Agent of such expenditure, or (ii) a Tucows Group Entity has
Committed to expend such Net Proceeds for the repair or replacement of the affected property
within 180 days of receipt of such Net Proceeds and such Net Proceeds are actually used for
the repair or replacement of the affected property within 365 days of the receipt thereof.
Section 2.07Repayments of Credit Excess.
The Borrowers shall repay to the Agent, for the account of the Lenders, the amount of
any Credit Excess with respect to the Credit Facility existing from time to time, to the extent any
Canadian Prime Rate Advance, Base Rate (Canada) Advance, or Base Rate (United States)
Advance is outstanding, on the first (1st) Business Day following the date of demand by the
Agent. Notwithstanding the foregoing, any Credit Excess that is a result of currency fluctuations
shall be addressed in accordance with Section 2.12.
Section 2.08Voluntary Prepayments.
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The Borrowers may, subject to the provisions of this Agreement and without penalty or
bonus, (1) in respect of any outstanding CORRA Loan or SOFR Loan, Cash Collateralize such
outstanding CORRA Loan or SOFR Loan, or (2) in respect of any other Type of Advance,
prepay the Accommodations Outstanding under the Credit Facility in respect of such Advance,
and/or reduce the Commitment, in each case, in whole or, subject to the next following
sentence, in part, upon the number of Business Days’ notice to the Agent specified in Schedule
5 by a notice substantially in the form of SCHEDULE 9 (a “Payment Reduction Notice”), which
shall be irrevocable and binding on the Borrowers and which shall specify the proposed date
and aggregate principal amount of the prepayment or reduction. In such case, the Borrowers
shall pay to the applicable Lenders in accordance with such notice the amount of such
prepayment or the amount by which the Accommodations Outstanding under the Credit Facility
exceed the proposed reduced Commitment. Each partial prepayment or reduction pursuant to
this Section 2.08 shall be in a minimum aggregate principal amount of $500,000 and an integral
multiple of $100,000. Notwithstanding the foregoing, the Parent may permanently reduce the
Commitment of a Defaulting Lender in accordance with Section 2.16.
Section 2.09Payments under this Agreement.
(1)Unless otherwise expressly provided in this Agreement, the Borrowers shall make
any payment required to be made by them to the Agent by depositing the amount of the
payment to the applicable Borrower’s Account not later than 12:00 p.m. (Toronto time) on the
date the payment is due. The Agent shall distribute to each applicable Lender promptly on the
date of receipt by the Agent of any payment, an amount equal to the amount then due to each
Lender.
Unless otherwise expressly provided in this Agreement, the Agent shall make Accommodations and other
payments to the applicable Borrower under this Agreement by crediting the applicable Borrower’s Account (or
causing the applicable Borrower’s Account to be
credited) with the amount of the payment in the relevant currency not later than 1:00 p.m.
(Toronto time) on the date the payment is to be made.
(2)The Borrowers shall pay to the Agent on behalf of each applicable Lender on
written demand any amounts required to compensate the Lenders for any actual loss suffered
or incurred by it as a result of (i) the failure of the Borrowers to effect an Accommodation in the
manner and at the time specified in any Accommodation Notice; (ii) any payment being made in
respect of a SOFR Loan or a CORRA Loan other than on the date permitted hereunder in
respect thereof or the conversion of any SOFR Loan or a CORRA Loan other than on the date
permitted hereunder in respect thereof; or (iii) the failure of the Borrowers to make a payment
or a mandatory repayment in the manner and at the time specified in this Agreement. Written
notice as to the amount of any such loss submitted in good faith by a Lender to the Borrowers
shall be prima facie evidence of such amount.
Section 2.10Application of Payments and Prepayments.
Subject to Section 9.03, all amounts received by the Agent from or on behalf of the
Borrowers and not previously applied pursuant to this Agreement shall be applied by the Agent
as follows (i) first, in reduction of the Borrowers’ obligations to pay any unpaid expenses of the
Agent; (ii) second, in reduction of the Borrowers’ obligations to pay any unpaid interest and any
Fees which are due and owing; (iii) third, in reduction of the Borrowers’ obligations to pay any
claims or losses referred to in Section 16.01; (iv) fourth, in reduction of the Borrowers’
obligations to pay any amounts due and owing on account of any unpaid principal amount of
Advances which are due and owing; (v) fifth, in reduction of the Borrowers’ obligations to pay
any other unpaid Accommodations Outstanding which are due and owing; (vi) sixth, in reduction
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of any other obligation of the Borrowers under this Agreement and the other Loan Documents;
and (vii) seventh, to the Borrowers or such other Persons as may lawfully be entitled to or
directed to receive the remainder.
Section 2.11Computations of Interest and Fees.
(1)All computations of interest shall be made by the Agent taking into account the
actual number of days occurring in the period for which such interest is payable, and (i) if based
on the Canadian Prime Rate, CORRA Loans, the Base Rate (Canada) or the Base Rate
(United States), on the basis of a year of 365 or 366 days, as the case may be; provided that, to
the extent that clause (ii) of the definition of Base Rate (Canada) or the Base Rate (United
States) contemplates that the Base Rate (Canada) or the Base Rate (United States), as
applicable, shall be determined by reference to the Federal Funds Rate, any such
determination shall be made on the basis of the actual number of days elapsed over a year of
360 days; and (ii) if based on Daily Simple SOFR or Term SOFR, on the basis of a year of 360
days.
(2)All computations of Fees shall be made by the Agent on the basis of a year of 365
or 366 days, as the case may be, taking into account the actual number of days occurring in the
period for which such fees are payable.
For purposes of the Interest Act (Canada), whenever any interest or fee under this Agreement is calculated
using a rate based on a number of days less than a full year, such rate determined pursuant to such
calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate, (y) multiplied by the
actual number of days in the calendar year in which the period for which such interest or fee is payable (or
compounded) ends, and (z) divided by the
number of days based on which such rate is calculated. The principle of deemed reinvestment
of interest does not apply to any interest calculation under this Agreement. The rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective rates or yields.
Section 2.12Adjustment for Currency Fluctuations.
If the Agent shall notify the Parent in writing not later than 4:00 p.m. (Toronto time) on
an Exchange Rate Determination Date that solely by reason of fluctuations in currency
valuation, the Accommodations Outstanding under the Credit Facility exceed 103% of the
Commitment on the date immediately preceding such Exchange Rate Determination Date (the
amount by which such Accommodations Outstanding exceed such Commitment on such date
being the “Excess”), the Borrowers shall, within three (3) Business Days thereafter, make a
payment by repaying Advances outstanding under the Credit Facility in an amount equal to the
Excess or, (y) if the Borrowers do not have Advances outstanding under the Credit Facility in an
amount equal to or greater than the Excess, make a payment by repaying all Advances in
amounts less than the Excess (if any) under the Credit Facility and by depositing with the Agent
an amount equal to the amount by which the Excess exceeds the amount of the Advances
under the Credit Facility repaid to be held by the Agent in trust for the applicable Lenders. Any
interest on the amount deposited with the Agent shall be held in trust for the Borrowers and
shall be paid to the Borrowers on the next Exchange Rate Determination Date.
Section 2.13Standby Fee
The Borrowers agree to pay a non-refundable standby fee (the “Standby Fee”) to the
Agent for the account of the Lenders, calculated at a rate per annum on the basis of a year of
365 days, or 366 days in the case of a leap year, equal to the Standby Fee Rate on the daily
unadvanced portion of the Credit Facility. The Standby Fee shall be calculated and accrue daily
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from the date hereof and shall be payable quarterly in arrears on the last Business Day of each
calendar quarter and on the Maturity Date of the Credit Facility.
Section 2.14Upfront Fee
On the Closing Date, the Borrowers shall pay to the Agent on behalf of the Lenders an
upfront fee in the amount of $864,000.00 (which fee amountsequal to 12 bps per annum for a
three (3) year period on the amountterm of the extension of the Credit Facility), which fee shall
be paid by the Agent to each Lender in accordance with such Lender’s pro rata share of the
Credit Facility.
Section 2.15Defaulting Lender Adjustments.
(1)Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time
as such Lender is no longer a Defaulting Lender, to the extent permitted by Law:
Waivers and Amendments. No Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such Defaulting Lender may not be
increased or extended without the consent of such Defaulting Lender. No Defaulting Lender shall be included
as a Lender for purposes of the calculation of “Majority Lenders”.
Defaulting Lender Waterfall. Any payment of principal, interest, fees, indemnity payments or other amounts
received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity,
pursuant to Article 9 or otherwise) or received by the Agent from a Defaulting Lender pursuant to Section
12.01 shall be applied at such time or times as may be determined by the Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, to the payment
on a pro rata basis of any amounts owing by such Defaulting Lender to each Fronting Letter of Credit Lender
hereunder; third, to Cash Collateralize each Fronting Letter of Credit Lender’s Fronting Exposure with respect
to such Defaulting Lender in accordance with Section 4.10; fourth, as the Borrowers may request (so long as
no Default or Event of Default exists), to the funding of any Accommodation in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this Agreement; fifth, if so determined
by the Agent and the Parent, to be held in a deposit account and released pro rata in order to (x) satisfy such
Defaulting Lender’s potential future funding obligations with respect to Accommodations under this
Agreement and (y) Cash Collateralize each Fronting Letter of Credit Lender’s future Fronting Exposure with
respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in
accordance with Section 4.10; sixth, to the payment of any amounts owing to the Lenders or each Fronting
Letter of Credit Lender as a result of any judgment of a court of competent jurisdiction obtained by any
Lender or Fronting Letter of Credit Lender against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default
exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of
competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of
the principal amount of any Accommodations or Letter of Credit Obligations in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such Accommodations were made or
the related Letters of Credit were issued at a time when the conditions set forth herein were satisfied or
waived, such payment shall be applied solely to pay the Accommodations made by, and Letter of Credit
Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of
any Accommodations made by, or Letter of Credit Obligations owed to, such Defaulting Lender until such
time as all Accommodations and funded and unfunded participations in Letter of Credit Obligations are held
by the Lenders pro rata in accordance with their applicable Commitments without giving effect to Section
2.15(1)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are
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applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.15(1)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.
(i)Certain Fees.
(A)No Defaulting Lender shall be entitled to receive any fee pursuant
to Section 2.13, Section 2.14 and Section 4.06 for any period
during which that Lender is a Defaulting Lender (and the
Borrowers shall not be required to pay any such fee that otherwise
would have been required to have been paid to that Defaulting
Lender); provided such Defaulting Lender shall be entitled to
receive fees pursuant to Section 4.06 for any period during which
that Lender is a Defaulting Lender only to the extent allocable to
its pro rata share of the stated amount of Letters of Credit for
which it has provided Cash Collateral pursuant to Section 4.10.
(B)With respect to any fee not required to be paid to any Defaulting
Lender pursuant to clause (A) above, the Borrowers shall (x) pay
to each Non-Defaulting Lender that portion of any such fee
otherwise payable to such Defaulting Lender with respect to such
Defaulting Lender’s participation in Letter of Credit Obligations
that has been reallocated to such Non-Defaulting Lender pursuant
to clause (iv) below, (y) pay to the applicable Fronting Letter of
Credit Lender the amount of any such fee otherwise payable to
such Defaulting Lender with respect to such Fronting Letter of
Credit Lender’s Fronting Exposure to such Defaulting Lender that
has not been reallocated pursuant to clause (iv) below (except
where the Borrowers shall have provided Cash Collateral for such
Fronting Exposure pursuant to Section 4.10, in which case the
Borrowers shall not be required to pay any fee relating to the
amount of such Cash Collateral) and (z) not be required to pay
the remaining amount of any such fee.
(ii)Reallocation of Participations to Reduce Fronting Exposure. Upon written
notice to the Parent, all or any part of such Defaulting Lender’s
participation in Letter of Credit Obligations shall be automatically
reallocated among the Non-Defaulting Lenders in accordance with their
respective pro rata share of the Commitment (calculated without regard
to such Defaulting Lender’s Commitment) but only to the extent that such
reallocation does not cause the aggregate Accommodations Outstanding
under the Credit Facility of any Non-Defaulting Lender to exceed the
Commitment held by such Non-Defaulting Lender. No reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of the Borrowers, the
Agent or any Fronting Letter of Credit Lender as a result of such breach
or a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation.
Cash Collateral. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the
Borrowers shall, without prejudice to any right or remedy available to it hereunder or under Law, Cash
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Collateralize each Fronting Letter of Credit Lender’s Fronting Exposure, to the extent such re-allocation has
not eliminated the Defaulting Lender’s
participation in Letter of Credit Obligations in accordance with the
procedures set forth in Section 4.10.
(2)Defaulting Lender Cure. If the Parent, the Agent and each Fronting Letter of Credit
Lender agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify
the parties hereto, whereupon as of the effective date specified in such notice and subject to
any conditions set forth therein (which may include arrangements with respect to any Cash
Collateral), that Lender will, to the extent applicable, purchase at par that portion of
Accommodations Outstanding of the other Lenders or take such other actions as the Agent
may determine to be necessary to cause the Accommodations Outstanding and funded and
unfunded participations in Letters of Credit to be held pro rata by the applicable Lenders in
accordance with the applicable Commitments (without giving effect to Section 2.15(1)(iv)),
whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on behalf of the
Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender.
(3)New Letters of Credit. So long as any Lender which has a Commitment is a
Defaulting Lender, no Fronting Letter of Credit Lender shall be required to issue, extend, renew
or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after
giving effect thereto.
(4)Termination of Defaulting Lender Commitment. The Parent may terminate the
unused amount of the Commitment of a Defaulting Lender upon not less than three (3)
Business Days’ prior notice to the Agent (who will promptly notify the Lenders thereof), provided
that such termination will not be deemed to be a waiver or release of any claim the Borrowers,
the Agent, any Fronting Letter of Credit Lender or any other Lender may have against such
Defaulting Lender.
Section 2.16Replacement Lenders.
The Parent at its own cost and expense may designate an Eligible Assignee with the prior written consent of
the Agent (and acceptable to each Fronting Letter of Credit Lender and the Swingline Lender), such consent
not to be unreasonably withheld, conditioned or delayed (a “Replacement Lender”) to assume all or any
part of the Commitments and the obligations of any Defaulting Lender hereunder, and to purchase the
Accommodations Outstanding of such Defaulting Lender and such Defaulting Lender’s rights hereunder and
with respect thereto, and within ten (10) Business Days of such designation the Defaulting Lender shall (x)
sell to such Replacement Lender, without recourse upon, warranty by or expense to such Defaulting Lender,
by way of an Assignment and Assumption for a purchase price equal to (unless such Defaulting Lender
agrees to a lesser amount in writing) the outstanding principal amount of the Accommodations made by such
Defaulting Lender, plus all interest accrued and unpaid thereon and all other amounts owing to such
Defaulting Lender hereunder, and (y) assign to such Replacement Lender the Commitments of such
Defaulting Lender. In the event any Defaulting Lender fails to execute the Assignment and Assumption in
connection with an assignment pursuant to this Section, the Agent may, but only after such Defaulting Lender
has been paid in full what it is entitled to be paid under this Section, upon two (2) Business Days’ prior notice
to the Defaulting Lender, execute such agreement on behalf of the Defaulting Lender, and each Lender
hereby grants to the Agent an irrevocable power of attorney (which shall be coupled
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with an interest) for such purpose. Upon such assumption and purchase by the Replacement
Lender and subject to acceptance and recording of such Assignment and Assumption by the
Agent pursuant to Section 17.01(3) hereof, such Replacement Lender shall be deemed to be a
“Lender” for purposes of this Agreement and such Defaulting Lender shall cease to be a
“Lender” for purposes of this Agreement and shall no longer have any obligations or rights
hereunder (other than any obligations or rights which according to this Agreement shall survive
the termination of the Commitments). Additionally, in the event a Defaulting Lender has been a
Defaulting Lender for more than ninety (90) consecutive days, the Borrowers, at their own cost
and expense, may repay in full all outstanding obligations under the Loan Documents (except
for the Eligible Hedging Agreements and Other Secured Obligations) owed to such Defaulting
Lender and terminate in full all of the Commitment held by such Defaulting Lender, and upon
such repayment and termination such Defaulting Lender shall cease to be a “Lender” for
purposes of this Agreement and shall no longer have any obligations or rights hereunder (other
than any obligations or rights which according to this Agreement shall survive the termination of
the Commitments).
ARTICLE 3
ADVANCES
Section 3.01The Advances.
(1)Each applicable Lender severally and not jointly agrees, in accordance with the
terms and conditions of this Agreement and in accordance with the applicable Borrowing
Notice, to make Advances to the Borrowers from time to time on any Business Day prior to the
Maturity Date. The Swingline Lender agrees, in accordance with the terms and conditions of
this Agreement, to make Swingline Advances (on a same day basis) to the Borrowers from time
to time on any Business Day prior to the Maturity Date.
(2)Each Borrowing under the Credit Facility shall consist of Advances made to the
applicable Borrower on the same day by the applicable Lenders in accordance with each
applicable Lender’s relevant rateable portion. Each requested Advance shall be in at least the
minimum aggregate amount and in an integral multiple of the amount set forth in SCHEDULE
4.
The Swingline Lender may, in its sole discretion, give notice to the Agent who shall forthwith notify the
Lenders that the principal amount of the Swingline Lender’s outstanding Swingline Advances to the
Borrowers shall be funded with a Borrowing or Borrowings under the Credit Facility (provided that such
notice shall be deemed to have been given (y) on the Maturity Date if the Borrowers shall not have repaid
all Swingline Advances on or prior to such day, and (z) upon the occurrence of an Event of Default, in
which case Advances under the Credit Facility) (each such Borrowing, a “Mandatory Borrowing”) shall be
made on the next Business Day by all Lenders so that, immediately after the Mandatory Borrowing, each
Lender shall share rateably in the Accommodations Outstanding under the Credit Facility and the
proceeds of such Mandatory Borrowing shall be applied directly by the Agent to repay Advances
outstanding to the Swingline Lender. Each Lender shall make Advances pursuant to a Mandatory Borrowing
in the amount and in the manner specified in writing by the Agent notwithstanding (i) that the amount
of the Mandatory Borrowing may not comply with the minimum amount for Borrowings otherwise
required under this Agreement; (ii) that the conditions specified in Article 6 are not then satisfied; (iii) that
a Default or an Event of Default has occurred and is continuing; (iv) the date of such Mandatory
Borrowing; and (v) any reduction in the Commitment after any Swingline Advance was made by the
Swingline Lender.
In addition to the foregoing, the Borrowers shall cause each Swingline Advance to be repaid in
full on the last Business Day of each calendar week.
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(3)In connection with the use or administration of Daily Simple SOFR, Term SOFR,
SOFR or CORRA, the Agent will have the right to make Conforming Changes or Canadian
Benchmark Replacement Conforming Changes, as applicable, from time to time and,
notwithstanding anything to the contrary herein or in any other Loan Document, any
amendments implementing such Conforming Changes or Canadian Benchmark Replacement
Conforming Changes, as applicable, will become effective without any further action or consent
of any other party to this Agreement or any other Loan Document. The Agent will promptly
notify the Borrowers and the Lenders of the effectiveness of any Conforming Changes or
Canadian Benchmark Replacement Conforming Changes, as applicable, in connection with the
use or administration of Daily Simple SOFR, Term SOFR, SOFR or CORRA, as applicable.
Section 3.02Procedure for Borrowing.
(1)Except as provided in Section 3.02(2), each Borrowing shall be made on the
number of days prior notice specified in SCHEDULE 4, given not later than 11:00 a.m. (Toronto
time) by the applicable Borrower to the Agent. Each notice of a Borrowing (a “Borrowing
Notice”) shall be in substantially the form of SCHEDULE 1, shall be irrevocable and binding on
the applicable Borrower and shall specify (i) the requested date of the Borrowing; (ii) the Type
of Advance requested; (iii) the aggregate amount of the Borrowing; and (iv) in the case of a
SOFR Loan, whether the Advance will bear interest at Daily Simple SOFR or Adjusted Term
SOFR, and, (iv) in the case of a CORRA Loan, whether the Advance will bear interest at
Adjusted Term CORRA or Adjusted Daily Compounded CORRA, and (v) in the case of any
SOFR Loan or any CORRA Loan, the initial Interest Period. Upon receipt by the Agent of funds
from the applicable Lenders and fulfilment of the applicable conditions set forth in Article 6, the
Agent will make such funds available to the applicable Borrower in accordance with Article 2.
(2)Each Swingline Advance (i) may be made on the same day’s telephone request
(followed by notification via a Borrowing Notice) made on or before 11:00 a.m. (Toronto time)
on such day and in such amount, as requested by the applicable Borrower to the Swingline
Lender, providing the same information to the Swingline Lender as would be contained in a
Borrowing Notice (which shall be deemed to have been so provided); or (ii) shall be made by
the Swingline Lender, without notice from or to the Borrowers, in respect of any overdraft in any
one or more of the accounts of the Borrowers with the Swingline Lender by deposit to such
account of an amount equal to such overdraft. All payments of principal and interest with
respect to a Swingline Advance shall be made by the Borrowers, as applicable, directly to the
Swingline Lender, and the Swingline Lender is hereby irrevocably authorized and directed to
debit any bank account maintained by the Borrowers with the Swingline Lender in order to
effect such payment.
Section 3.03Conversions and Rollovers Regarding Advances.
Subject to the Types of Accommodation and Advances, the Borrowers may elect to (i) change any Advance
outstanding, or any portion thereof, in each case, in the minimum aggregate amount referred to in
SCHEDULE 4 to another Type of Advance or convert an Advance outstanding to another Type of
Accommodation in the case of an Advance other than a SOFR Loan or CORRA Loan, as of any Business
Day, and in the case of a SOFR Loan or a CORRA Loan as of the last day of the Interest Period applicable
thereto; provided that in the case of the change or conversion of an Advance denominated in one currency to
an Advance
denominated in another currency, the principal amount and interest thereon of such Advance to
be changed or converted is paid in full on the date of such change or conversion; or (ii)
continue any Advance other than an Advance bearing interest at the Term SOFR Reference
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Rate for a further Interest Period beginning on the last day of the then current Interest Period
applicable to such Advance.
(3)Each election to change or convert an Advance into another Type of Advance or
Type of Accommodation or to continue an Advance other than an Advance bearing interest at
the Term SOFR Reference Rate for a further Interest Period, shall be made on the number of
days prior notice specified in SCHEDULE 4 given, in each case, not later than 11:00 a.m.
(Toronto time) by the applicable Borrower to the Agent. Each such notice (an “Interest Rate
Election Notice”) shall be given substantially in the form of SCHEDULE 2 and shall be
irrevocable and binding upon the applicable Borrower. If the applicable Borrower fails to deliver
an Interest Rate Election Notice to the Agent for any Advance other than an Advance bearing
interest at the Term SOFR Reference Rate or Daily Simple SOFR as provided in this Section
3.03(2), (i) in the case of a SOFR Loan, such Advance shall be converted (as of the last day of
the applicable Interest Period) to and be outstanding as a Base Rate (Canada) Advance or
Base Rate (United States) Advance, as applicable; (ii) in the case of a Term CORRA Loan, such
Advance shall be converted (as of the last day of the applicable Interest Period) to and be
outstanding as a Daily Compounded CORRA Loan, and (iii) in the case of a Daily Compounded
CORRA Loan, such Advance shall be converted (as of the last day of the applicable Interest
Period) to and be outstanding as Canadian Prime Rate Advance. No Borrower shall select an
Interest Period which conflicts with the definition of Interest Period.
Section 3.04Circumstances Affecting SOFR Loans and CORRA Loans
If any Lender determines that any Law has made it unlawful, or that any Governmental Entity has asserted
that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Advances whose
interest is determined by reference to Daily Simple SOFR, Term SOFR, SOFR, CORRA, Daily Compounded
CORRA, Term CORRA, Adjusted Daily Compounded CORRA or Adjusted Term CORRA or to determine or
charge interest rates based upon Daily Simple SOFR, Term SOFR, SOFR, CORRA, Daily Compounded
CORRA, Term CORRA, Adjusted Daily Compounded CORRA or Adjusted Term CORRA then, upon notice
thereof by such Lender to the Borrowers (through the Agent), (a) any obligation of such Lender to make or
continue Advances bearing interest at Daily Simple SOFR, Term SOFR or SOFR or to convert Base Rate
(Canada) Advances/Base Rate (United States) Advances to Advances bearing interest at Daily Simple
SOFR, Term SOFR or SOFR shall be suspended, (b) any obligation of such Lender to make or continue
Advances bearing interest at CORRA, Daily Compounded CORRA, Term CORRA, Adjusted Daily
Compounded CORRA or Adjusted Term CORRA or to convert Canadian Prime Rate Advances to Advances
bearing interest at CORRA, Daily Compounded CORRA, Term CORRA, Adjusted Daily Compounded
CORRA or Adjusted Term CORRA shall be suspended, and (c) if such notice asserts the illegality of such
Lender making or maintaining Base Rate (Canada) Advances/Base Rate (United States) Advances the
interest rate on which is determined by reference to Adjusted Term SOFR component of the Base Rate
(Canada)/Base Rate (United States), the interest rate on which Base Rate (Canada) Advances/Base Rate
(United States) Advances of such Lender shall, if necessary to avoid such illegality, be determined by the
Agent without reference to the Adjusted Term SOFR component of the Base Rate (Canada)/Base Rate
(United States), in each case until such Lender notifies the Agent and the Borrowers that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Borrowers shall, upon
demand from such Lender (with a copy to the Agent), prepay or, if
applicable, convert all applicable SOFR Loans of such Lender to Base Rate (Canada)
Advances/Base Rate (United States) Advances (the interest rate on which Base Rate (Canada)
Advances/Base Rate (United States) Advances of such Lender shall, if necessary to avoid such
illegality, be determined by the Agent without reference to the Adjusted Term SOFR component
of the Base Rate (Canada)/Base Rate (United States)) immediately, if such Lender may not
lawfully continue to maintain such SOFR Loan, (ii) the Borrowers shall, upon demand from such
Lender (with a copy to the Agent), prepay or, if applicable, convert all applicable Term CORRA
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Loans of such Lender to Daily Compounded CORRA Loans and all applicable Daily
Compounded CORRA Loans to Canadian Prime Rate Advances immediately, if such Lender
may not lawfully continue to maintain such CORRA Loan and (iii) if such notice asserts the
illegality of such Lender determining or charging interest rates based upon Daily Simple SOFR,
Term SOFR or SOFR, as applicable, the Agent shall during the period of such suspension
compute the Base Rate (Canada) /Base Rate (United States) applicable to such Lender without
reference to the Adjusted Term SOFR component thereof until the Agent is advised in writing
by such Lender that it is no longer illegal for such Lender to determine or charge interest rates
based upon Daily Simple SOFR, Term SOFR or SOFR, as applicable. Upon any such
prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so
prepaid or converted, together with any additional amounts required pursuant to this
Agreement.
If any Change in Law (i) shall subject any Lender (or its lending office) to any tax, duty or other charge with
respect to its SOFR Loans or CORRA Loans owed to it or its obligation to make SOFR Loans or CORRA
Loans, or shall change the basis of taxation of payments to such Lender (or its lending office) of the principal
of or interest on its SOFR Loans, CORRA Loans or any other amounts due under this Agreement or any
other Loan Document in respect of its SOFR Loans or CORRA Loans or its obligation to make SOFR Loans
or CORRA Loans (except for changes in the rate of tax on the overall net income of such Lender or its
lending office imposed by the jurisdiction in which such Lender’s principal executive office or lending office is
located); or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement
(including any such requirement imposed by the FRB) on such Lender (or its lending office) or shall impose
on such Lender (or its lending office) or on the interbank market any other condition affecting its SOFR Loans
or CORRA Loans or its obligation to make SOFR Loans or CORRA Loans; and the result of any of the
foregoing is to increase the cost to such Lender (or its lending office) of making or maintaining any SOFR
Loan or CORRA Loan, or to reduce the amount of any sum received or receivable by such Lender (or its
lending office) under this Agreement or under any other Loan Document with respect thereto, by an amount
deemed by such Lender to be material, then, upon notice thereof by such Lender to the Borrowers any
obligation of such Lender to make or continue SOFR Loans or CORRA Loans, as applicable, shall be
suspended (to the extent of the affected SOFR Loans, CORRA Loans and the affected Interest Periods) until
such Lender revokes such notice in addition to any other obligations hereunder. Upon receipt of such notice,
(i) the Borrowers may revoke any pending request for a borrowing of, conversion to or continuation of SOFR
Loans or CORRA Loans (to the extent of the affected SOFR Loans, CORRA Loans and the affected Interest
Periods) or, failing that, the Borrowers will be deemed to have converted any such request into a request for
an Advance of or conversion to Base Rate (Canada) Advances or Canadian Prime Rate Advances, as
applicable, in the amount specified therein and (ii) any outstanding affected SOFR Loans or CORRA Loans,
as applicable, will be deemed to have been converted into Base Rate (Canada) Advances or Canadian Prime
Rate Advances immediately. Upon any such conversion, the Borrowers shall also pay any additional amounts
required pursuant to this Agreement.
Section 3.05Interest on Advances.
(1)The Borrowers shall pay interest on the unpaid principal amount of each Advance
to it from the date of such Advance (or conversion of another Type of Advance into such
Advance) until the date on which the principal amount of the Advance is repaid in full (or is
converted into another Type of Advance or Type of Accommodation) at the following rates per
annum:
(a)Base Rate (Canada) Advances. If and so long as such Advance is a Base Rate
(Canada) Advance and subject as provided in the following sentence, at a rate
per annum equal at all times to the Base Rate (Canada) in effect from time to
time plus the Applicable Margin, calculated daily and payable in arrears (i) on the
first Business Day of each month in each year; and (ii) on the day on which such
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Base Rate (Canada) Advance becomes due and payable in full pursuant to the
provisions hereof. Any amount of principal of, or interest on, any such Base Rate
(Canada) Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall be payable on demand and shall bear interest
(both before and after judgment), from the date on which such amount is due
until such amount is paid in full, at a rate per annum equal to the Base Rate
(Canada) in effect from time to time plus the Applicable Margin plus, to the
extent permitted by law, 2%.
(b)Base Rate (United States) Advances. If and so long as such Advance is a
Base Rate (United States) Advance and subject as provided in the following
sentence, at a rate per annum equal at all times to the Base Rate (United States)
in effect from time to time plus the Applicable Margin, calculated daily and
payable in arrears (i) on the first Business Day of each month in each year; and
(ii) on the day on which such Base Rate (United States) Advance becomes due
and payable in full pursuant to the provisions hereof. Any amount of principal of,
or interest on, any such Base Rate (United States) Advance which is not paid
when due (whether at stated maturity, by acceleration or otherwise) shall be
payable on demand and shall bear interest (both before and after judgment),
from the date on which such amount is due until such amount is paid in full, at a
rate per annum equal to the Base Rate (United States) in effect from time to time
plus the Applicable Margin plus, to the extent permitted by law, 2%.
Canadian Prime Rate Advances. If and so long as such Advance is a Canadian Prime Rate Advance and
subject as provided in the following sentence, at a rate per annum equal at all times to the Canadian Prime
Rate in effect from time to time plus the Applicable Margin, calculated daily and payable in arrears (i) on the
first Business Day of each month in each year; and (ii) on the day on which such Canadian Prime Rate
Advance becomes due and payable in full pursuant to the provisions hereof. Any amount of principal of, or
interest on, any such Canadian Prime Rate Advance which is not paid when due (whether at stated maturity,
by acceleration or otherwise) shall be payable on demand and shall bear interest (both before and after
judgment), from the date on which such amount is due until such amount is paid in full, at a rate per annum
equal to the Canadian Prime Rate in effect from time to time plus the Applicable Margin plus, to the extent
permitted by law, 2%.
(c)Adjusted Daily Simple SOFR Loans. If and so long as such SOFR Loan bears
interest at Adjusted Daily Simple SOFR and subject as provided in the following
sentence, at a rate per annum equal at all times during any Interest Period for
such SOFR Loan to Adjusted Daily Simple SOFR for such Interest Period plus
the Applicable Margin, calculated daily and payable in arrears on (i) the
applicable Interest Payment Date in respect thereof; and (ii) on the day on which
such SOFR Loan becomes due and payable in full pursuant to the provisions
hereof. Any amount of principal of or interest on any such SOFR Loan which is
not paid when due (whether at stated maturity, by acceleration or otherwise)
shall be payable on demand and shall bear interest (both before and after
judgment), from the date on which such amount is due until such amount is paid
in full, at a rate per annum equal to the Base Rate (Canada) in effect from time
to time plus the Applicable Margin plus, to the extent permitted by law, 2%.
(d)Adjusted Term SOFR Loans. If and so long as SOFR Loan bears interest at
Adjusted Term SOFR and subject as provided in the following sentence, at a
rate per annum equal at all times during any Interest Period for such SOFR Loan
to Adjusted Term SOFR for such Interest Period plus the Applicable Margin,
calculated daily and payable in arrears, on (i) the applicable Interest Payment
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Date in respect thereof; and (ii) on the day on which such SOFR Loan becomes
due and payable in full pursuant to the provisions hereof. Any amount of principal
of or interest on any such SOFR Loan which is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall be payable on demand and
shall bear interest (both before and after judgment), from the date on which such
amount is due until such amount is paid in full, at a rate per annum equal to the
Base Rate (Canada) in effect from time to time plus the Applicable Margin plus,
to the extent permitted by law, 2%.
(e)Adjusted Term CORRA Loans. If and so long as each Term CORRA Loan
bears interest at Adjusted Term CORRA and subject as provided in the following
sentence, at a rate per annum equal at all times during any Interest Period for
such Term CORRA Loan to Adjusted Term CORRA for such Interest Period plus
the Applicable Margin, calculated daily and payable in arrears, on (i) the
applicable Interest Payment Date in respect thereof; and (ii) on the day on which
such Term CORRA Loan becomes due and payable in full pursuant to the
provisions hereof. Any amount of principal of or interest on any such Term
CORRA Loan which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall be payable on demand and shall bear interest
(both before and after judgment), from the date on which such amount is due
until such amount is paid in full, at a rate per annum equal to the Canadian
Prime Rate in effect from time to time plus the Applicable Margin plus, to the
extent permitted by law, 2%.
Adjusted Daily Compounded CORRA Loans. If and so long as each Daily Compounded CORRA Loan
bears interest at Adjusted Daily Compounded CORRA and subject as provided in the following sentence, at a
rate per annum equal at all times during any Interest Period for such Daily Compounded CORRA Loan to
Adjusted Daily Compounded CORRA for such Interest Period plus the Applicable Margin, calculated daily and
payable in arrears, on (i) the applicable Interest Payment Date in respect thereof; and (ii) on the day on which
such Daily Compounded CORRA Loan becomes due and payable in full pursuant to the
provisions hereof. Any amount of principal of or interest on any such Daily
Compounded CORRA Loan which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall be payable on demand and shall
bear interest (both before and after judgment), from the date on which such
amount is due until such amount is paid in full, at a rate per annum equal to the
Canadian Prime Rate in effect from time to time plus the Applicable Margin plus,
to the extent permitted by law, 2%.
(f)Maximum Lawful Rate. Anything herein to the contrary notwithstanding, the
obligations of the Borrowers hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrowers shall pay such Lender interest at the
highest rate permitted by applicable law (“Maximum Lawful Rate”); provided,
however, that if at any time thereafter the rate of interest payable hereunder is
less than the Maximum Lawful Rate, the Borrowers shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Agent, on behalf of Lenders, is equal to the total interest that would
have been received had the interest payable hereunder been (but for the
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operation of this paragraph) the interest rate payable since the Closing Date as
otherwise provided in this Agreement.
Section 3.06Benchmark Replacement Setting – SOFR
(1)Inability to determine rates. If, on or prior to the first day of any Interest Period
for any SOFR Loan:
(i)the Agent determines (which determination shall be conclusive and
binding absent manifest error) that Term SOFR or Daily Simple SOFR
cannot be determined pursuant to the definition thereof; or
(ii)the Lenders determine that for any reason in connection with any request
for a SOFR Loan or a conversion thereto or a rollover thereof that Term
SOFR or Daily Simple SOFR for any requested Interest Period with
respect to a proposed SOFR Loan does not adequately and fairly reflect
the cost to such Lenders of making and maintaining such SOFR Loan,
and the Lenders have provided notice of such determination to the Agent,
the Agent will promptly so notify the Borrowers, the Agent and each Lender. Upon notice thereof being given
by the Agent to the Borrowers, any obligation of the Lenders to make SOFR Loans, and any right of the
Borrowers to rollover SOFR Loans or to convert Base Rate (United States) Advances to SOFR Loans, shall
be suspended (to the extent of the affected SOFR Loans or affected Interest Periods) until the Agent (with
respect to clause (ii), at the instruction of the Lenders) revokes such notice. Upon receipt of such notice, (A)
the Borrowers may revoke any pending request for an advance or rollover of or conversion to SOFR Loans
(to the extent of the affected SOFR Loans or affected Interest Periods) or, failing that, the Borrowers will be
deemed to have converted any such request into a request for an advance of or conversion to Base Rate
(United States) Advances in the amount specified therein and (B) any outstanding
affected SOFR Loans will be deemed to have been converted into Base Rate (United
States) Advances at the end of the applicable Interest Period. Upon any such
conversion, the Borrowers shall also pay accrued interest on the amount so converted,
together with any additional amounts required pursuant to this Agreement.
(2)Benchmark Replacement Setting.
(i)Benchmark Replacement. Notwithstanding anything to the contrary
herein or in any other Loan Document, upon the occurrence of a
Benchmark Transition Event, the Agent and the Borrowers may amend
this Agreement to replace the then-current Benchmark with a Benchmark
Replacement. Any such amendment with respect to a Benchmark
Transition Event will become effective at 5:00 p.m. (Toronto time) on the
fifth (5th) Business Day after the Agent has posted such proposed
amendment to all affected Lenders and the Borrowers so long as the
Agent has not received, by such time, written notice of objection to such
amendment from Lenders comprising the Majority Lenders. No
replacement of a Benchmark with a Benchmark Replacement pursuant to
this Section 3.06 will occur prior to the applicable Benchmark Transition
Start Date. Each Eligible Hedging Agreement shall be deemed to be a
“Loan Document” for purposes of this Section 3.06.
(ii)Benchmark Replacement Conforming Changes. In connection with the
use, administration, adoption or implementation of a Benchmark
Replacement, the Agent will have the right to make Conforming Changes
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from time to time and, notwithstanding anything to the contrary herein or
in any other Loan Document, any amendments implementing such
Conforming Changes will become effective without any further action or
consent of any other party to this Agreement or any other Loan
Document.
(iii)Notices; Standards for Decisions and Determinations. The Agent will
promptly notify the Borrowers and the Lenders of (A) the implementation
of any Benchmark Replacement and (B) the effectiveness of any
Conforming Changes in connection with the use, administration, adoption
or implementation of a Benchmark Replacement. The Agent will promptly
notify Borrowers of the removal or reinstatement of any tenor of a
Benchmark pursuant to Section 3.06(2)(iv). Any determination, decision
or election that may be made by the Agent or, if applicable, any Lender
(or group of Lenders) pursuant to this Section 3.06, including any
determination with respect to a tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date and any
decision to take or refrain from taking any action or any selection, will be
conclusive and binding absent manifest error and may be made in its or
their sole discretion and without consent from any other party to this
Agreement or any other Loan Document, except, in each case, as
expressly required pursuant to this Section 3.06.
Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan
Document, at any time (including in
connection with the implementation of a Benchmark Replacement), (A) if
the then-current Benchmark is a term rate (including the Term SOFR
Reference Rate) and either (x) any tenor for such Benchmark is not
displayed on a screen or other information service that publishes such
rate from time to time as selected by the Agent in its reasonable
discretion or (y) the regulatory supervisor for the administrator of such
Benchmark has provided a public statement or publication of information
announcing that any tenor for such Benchmark is not or will not be
representative, then the Agent may modify the definition of “Interest
Period” (or any similar or analogous definition) for any Benchmark
settings at or after such time to remove such unavailable or non-
representative tenor and (B) if a tenor that was removed pursuant to
clause (A) above either (x) is subsequently displayed on a screen or
information service for a Benchmark (including a Benchmark
Replacement) or (y) is not, or is no longer, subject to an announcement
that it is not or will not be representative for a Benchmark (including a
Benchmark Replacement), then the Agent may modify the definition of
“Interest Period” (or any similar or analogous definition) for all
Benchmark settings at or after such time to reinstate such previously
removed tenor.
(iv)Benchmark Unavailability Period. Upon the Borrowers’ receipt of notice
of the commencement of a Benchmark Unavailability Period, the
Borrowers may revoke any pending request for a SOFR drawdown of,
conversion to or rollover of SOFR Loans to be made, converted or
rolled-over during any Benchmark Unavailability Period and, failing that,
the Borrowers will be deemed to have converted any such request into a
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request for a drawdown of, conversion to or rollover of Base Rate (United
States) Advances.
Section 3.07Canadian Benchmark Replacement Setting
Notwithstanding anything to the contrary herein or in any other Loan Document:
(1)Canadian Benchmark Replacement Setting. Notwithstanding anything to the
contrary herein or in any other Loan Document, if a Canadian Benchmark
Transition Event and its related Canadian Benchmark Replacement Date have
occurred prior any setting of the then-current Benchmark, then (x) if a Canadian
Benchmark Replacement is determined in accordance with clause (a) of the
definition of “Canadian Benchmark Replacement” for such Canadian Benchmark
Replacement Date, such Canadian Benchmark Replacement will replace such
Canadian Benchmark for all purposes hereunder and under any Loan Document
in respect of such Canadian Benchmark setting and subsequent Canadian
Benchmark settings without any amendment to, or further action or consent of
any other party to, this Agreement or any other Loan Document and (y) if a
Canadian Benchmark Replacement is determined in accordance with clause (b)
of the definition of “Canadian Benchmark Replacement” for such Canadian
Benchmark Replacement Date, such Canadian Benchmark Replacement will
replace such Canadian Benchmark for all purposes hereunder and under any
Loan Document in respect of any Canadian Benchmark setting at or after 5:00
p.m. (Toronto time) on the fifth (5th) Business Day after the date notice of such
Canadian Benchmark Replacement is provided to the Borrowers without any
amendment to, or further action or consent of any other party to, this Agreement
or any other Loan Document so long as the Agent has not received, by such
time, written notice of objection to such Canadian Benchmark Replacement from
any Lender or the Borrowers. If the Canadian Benchmark Replacement is
Adjusted Daily Compounded CORRA, all interest payments will be payable on
the last day of each Interest Period.
(2)Canadian Benchmark Replacement Conforming Changes. In connection with
the use, administration, adoption or implementation of a Canadian Benchmark
Replacement, the Agent will have the right to make Canadian Benchmark
Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan Document, any amendments
implementing such Canadian Benchmark Replacement Conforming Changes will
become effective without any further action or consent of any other party to this
Agreement or any other Loan Document.
(3)Notices; Standards for Decisions and Determinations. The Agent will
promptly notify the Borrowers of (i) the implementation of any Canadian
Benchmark Replacement and (ii) the effectiveness of any Canadian Benchmark
Replacement Conforming Changes in connection with the use, administration,
adoption or implementation of a Canadian Benchmark Replacement. The Agent
will notify the Borrowers of (x) the removal or reinstatement of any tenor of a
Canadian Benchmark pursuant to Section 3.07(4) and (y) the commencement of
any Canadian Benchmark Unavailability Period. Any determination, decision or
election that may be made by the Agent pursuant to this Section 3.07 including
any determination with respect to a tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date and any
decision to take or refrain from taking any action or any selection, will be
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conclusive and binding absent manifest error and may be made in its or their
sole discretion and without consent from any other party to this Agreement or
any other Loan Document, except, in each case, as expressly required pursuant
to this Section 3.07.
Unavailability of Tenor of Canadian Benchmark. Notwithstanding anything to the contrary herein or in any
other Loan Document, at any time (including in connection with the implementation of a Canadian Benchmark
Replacement), (i) if the then-current Canadian Benchmark is a term rate (including Term CORRA) and either
(A) any tenor for such Canadian Benchmark is not displayed on a screen or other information service that
publishes such rate from time to time as selected by the Agent in its reasonable discretion or (B) the
regulatory supervisor for the administrator of such Canadian Benchmark has provided a public statement or
publication of information announcing that any tenor for such Canadian Benchmark is not or will not be
representative, then the Agent may modify the definition of “Interest Period” (or any similar or analogous
definition) for any Canadian Benchmark settings at or after such time to remove such unavailable or non-
representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is
subsequently displayed on a screen or information service for a Canadian Benchmark (including a Canadian
Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will
not be representative for a Canadian
Benchmark (including a Canadian Benchmark Replacement), then the Agent
may modify the definition of “Interest Period” (or any similar or analogous
definition) for all Canadian Benchmark settings at or after such time to reinstate
such previously removed tenor.
(4)Canadian Benchmark Unavailability Period. Upon the Borrowers’ receipt of
notice of the commencement of a Canadian Benchmark Unavailability Period,
the Borrowers may revoke any pending request for an Advance of, conversion to
or rollover of Advances, which are of the Type that have a rate of interest
determined by reference to the then-current Canadian Benchmark, to be made,
converted or continued during any Canadian Benchmark Unavailability Period
and, failing that, the Borrowers will be deemed to have converted any such
request into a request for an Advance of or conversion to, (i) for a Canadian
Benchmark Unavailability Period in respect of Term CORRA, Daily Compounded
CORRA Loans, and (ii) for a Benchmark Unavailability Period in respect of a
Benchmark other than Term CORRA, Canadian Prime Rate Advances.
Section 3.08Inability to Determine Rates – CORRA.
(1)Subject to Section 3.07, if, on or prior to the first day of any Interest Period for any
Term CORRA Loan:
(i)the Agent determines (which determination shall be conclusive and
binding absent manifest error) that “Adjusted Term CORRA” or “Adjusted
Daily Compounded CORRA”, as applicable, cannot be determined
pursuant to the definition thereof, for reasons other than a Canadian
Benchmark Transition Event, or
(ii)the Required Lenders determine that for any reason in connection with
any request for a Term CORRA Loan or a Daily Compounded CORRA
Loan, as applicable, or a conversion thereto or a rollover thereof that
Term CORRA or Daily Compounded CORRA, as applicable, for any
requested Interest Period with respect to a proposed Term CORRA Loan
or Daily Compounded CORRA Loan, does not adequately and fairly
reflect the cost to such Lenders of making and maintaining such
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Advance, and the Required Lenders have provided notice of such
determination to the Agent,
the Agent will promptly so notify the Borrowers and each Lender.
Upon delivery of such notice by the Agent to the Borrowers under Section 3.08(1), any obligation of the
Lenders to make Term CORRA Loans or Daily Compounded CORRA Loans, as applicable, and any right of
the Borrower to continue Term CORRA Loans or Daily Compounded CORRA Loans, as applicable, or to
convert Canadian Prime Rate Advances to Term CORRA Loans or Daily Compounded CORRA Loans, shall
be suspended (to the extent of the affected Term CORRA Loans or Daily Compounded CORRA Loans, as
applicable, or affected Interest Periods) until the Agent (with respect to clause (ii), at the instruction of the
Required Lenders) revokes such notice.
(2)Upon delivery of such notice by the Agent to the Borrower under Section 3.08(1),
(i)(x) the Borrowers may revoke any pending request for an Advance of,
conversion to or rollover of Term CORRA Loans or Daily Compounded CORRA
Loans, (to the extent of the affected Term CORRA Loans or Daily Compounded
CORRA Loans, or affected Interest Periods); (y) in respect of Term CORRA
Loans, the Borrowers may elect to convert any such request into a request for an
Advance of or conversion to Daily Compounded CORRA Loans; or, failing such
revocation or election, (z) the Borrowers will be deemed to have converted any
such request into a request for an Advance of or conversion to Canadian Prime
Rate Advances, in the amount specified therein and (ii)(x) in respect of Term
CORRA Loans, the Borrowers may elect to convert any outstanding affected
Term CORRA Loans at the end of the applicable Interest Period, into Daily
Compounded CORRA Loans, and (y) otherwise, or failing such election, any
outstanding affected Term CORRA Loans or Daily Compounded CORRA Loans,
as applicable, will be deemed to have been converted, at the end of the
applicable Interest Period, into Canadian Prime Rate Advances. Upon any such
conversion, the Borrowers shall also pay accrued interest on the amount so
converted, together with any additional amounts required pursuant to Section
2.09(3).
ARTICLE 4
LETTERS OF CREDIT
Section 4.01Letters of Credit.
The Fronting Letter of Credit Lender agrees on the terms and conditions of this
Agreement and in accordance with the applicable Issue Notice, to issue Letters of Credit for the
account of the Borrowers on any Business Day prior to the Maturity Date.
Section 4.02Issue Notice.
Each Issue shall be made on notice (an “Issue Notice”) given by the applicable
Borrower to the Fronting Letter of Credit Lender not later than 11:00 a.m. (Toronto time) on the
number of days’ notice specified in SCHEDULE 4. The Issue Notice shall be in substantially the
form of SCHEDULE 3, shall be irrevocable and binding on the applicable Borrower and shall
specify (i) the requested date of Issue (the “Issue Date”); (ii) the type and currency of such
Letter of Credit; (iii) the Face Amount of the Letter of Credit; (iv) the expiration date of the Letter
of Credit (which expiration date shall not (i) exceed 365 days from the Issue Date subject to
such extensions thereof of not more than 365 days as may be notified by the applicable
Borrower to the Fronting Letter of Credit Lender or (ii) extend beyond the Maturity Date, unless
as of the applicable Issue Date or date of extension as to each Letter of Credit preceding the
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Maturity Date, such Letters of Credit are Cash Collateralized), and (v) the name and address of
the Beneficiary.
Section 4.03Form of Letters of Credit.
Each Letter of Credit shall (i) be dated the Issue Date; (ii) have an expiration date on the date specified in
Section 4.02 or, if such date is not a Business Day on the Business Day immediately preceding such date;
(iii) comply with the definition of Letter of Credit; (iv) be issued in Canadian Dollars, U.S. Dollars or any other
currency agreed to by the Fronting Letter of Credit Lender; (v) be on the standard documentary forms
required by the Fronting Letter of
Credit Lender; and (vi) be subject to prior entry by the applicable Borrower into such master
agreement, application and other standard forms required by the Fronting Letter of Credit
Lender.
Section 4.04Procedure for Issuance of Letters of Credit.
(1)Not later than 12:00 noon (Toronto time) on an applicable Issue Date, the Fronting
Letter of Credit Lender will complete and issue an appropriate type of Letter of Credit (i) dated
the Issue Date; (ii) in favour of the Beneficiary; (iii) in a Face Amount equal to the amount
referred to in Section 4.02; and (iv) with the expiration date, as specified by the applicable
Borrower in its Issue Notice (subject to Section 4.03).
(2)The aggregate undrawn Face Amount of all Letters of Credit shall not, at any time,
exceed the lesser of (i) the Fronting Letter of Credit Lender’s Fronting Letter of Credit
Commitment, and (ii) the remaining Commitment of all of the Lenders, less the aggregate
outstanding principal balance of the Accommodations Outstanding under the Credit Facility
(including, for greater certainty, Swingline Advances).
(3)Unless otherwise agreed by the Fronting Letter of Credit Lender, no Letter of
Credit shall require payment against a conforming draft to be made thereunder on the same
Business Day upon which such draft is presented, if such presentation is made after 10:00 a.m.
(local time) on such Business Day.
(4)Prior to the Issue Date, the applicable Borrower shall specify a precise description
of the documents and the verbatim text of any certificates to be presented by the Beneficiary
which, if presented by the Beneficiary, would require the Fronting Letter of Credit Lender to
make payment under its applicable Letter of Credit. The Fronting Letter of Credit Lender may,
before the issue of the Letter of Credit and in consultation with the applicable Borrower, require
changes in any such documentation or certificate.
(5)In determining whether to pay under any Letter of Credit, the Fronting Letter of
Credit Lender shall be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered and that they comply
on their face with the requirements of such Letter of Credit.
Section 4.05Payment of Amounts Drawn Under Letters of Credit.
(1)The Fronting Letter of Credit Lender shall notify the applicable Borrower with
notice to the Agent on or before the date on which the Fronting Letter of Credit Lender intends
to honour any drawing under a Letter of Credit.
(2)In respect of each Letter of Credit, unless,
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(i)on the date of such drawing, the applicable Borrower has in response to
a demand from the Fronting Letter of Credit Lender deposited, in the
same day funds, to the applicable Borrower’s Account an amount equal
to the amount of such drawing,
then
the applicable Borrower shall be deemed to have given a Borrowing Notice to the Agent, requesting a
Canadian Prime Rate Advance, Base
Rate (Canada) Advance or Base Rate (United States) Advance, as
applicable, under the Credit Facility, and as determined by the Agent
acting reasonably, based upon the amount required on the date on which
such drawing is honoured in an amount equal to the amount of such
drawing (and the obligations in respect of any Letter of Credit
denominated in a currency other than Canadian Dollars or U.S. Dollars
shall be converted to U.S. Dollars for purposes hereof based on the
Equivalent Amount thereof in U.S. Dollars);
(i)the Lenders shall, on the date of such drawing, make such Canadian
Prime Rate Advance, Base Rate (Canada) Advance or Base Rate (United
States) Advance, as applicable, rateably under the Credit Facility, as
applicable; and
(ii)the Agent shall pay the proceeds thereof to the Fronting Letter of Credit
Lender as reimbursement for the amount of such drawing. The Agent
shall promptly notify the applicable Borrower of any such Canadian Prime
Rate Advance, Base Rate (Canada) Advance or Base Rate (United
States) Advance, as applicable.
(3)Each Lender, as applicable, shall be required to make its rateable portion of the
Advances referred to in Section 4.05(2) notwithstanding, (i) the amount of the Borrowing may
not comply with the minimum amount for Borrowings otherwise required under this Agreement;
(ii) that the conditions specified in Article 6 are not then satisfied; (iii) that a Default or Event of
Default has occurred and is continuing; (iv) the date of such Borrowing; (v) any reduction of the
Commitment after any Letter of Credit was issued by the Fronting Letter of Credit Lender; or
(v)the Accommodations Outstanding under the Credit Facility after giving effect to such
Advances would exceed the Commitment.
Section 4.06Fees.
(1)The applicable Borrower shall pay to the Agent, for the account of the Lenders, as
applicable, a Letter of Credit fee with respect to each outstanding Letter of Credit issued by the
Fronting Letter of Credit Lender at a rate per annum equal to the Applicable Margin, calculated
on the basis of the undrawn Face Amount of each such Letter of Credit, and a year of 365 or
366 days, calculated daily and payable in arrears on the third Business Day of each Financial
Quarter in respect of the immediately preceding Financial Quarter, and on the Maturity Date in
respect of the Credit Facility (the foregoing fees to be payable (x) in Canadian Dollars, with
respect to Letters of Credit denominated in Canadian Dollars, (y) in U.S. Dollars, with respect to
Letters of Credit denominated in U.S. Dollars), and (z) in the applicable currency of any Letter
of Credit denominated in a currency other than Canadian Dollars or U.S. Dollars.
The applicable Borrower shall pay to the Fronting Letter of Credit Lender, a fee equal to 25 basis points per
annum, calculated on the basis of the undrawn Face Amount of each outstanding Letter of Credit issued by
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the Fronting Letter of Credit Lender and a year of 365 or 366 days, calculated daily and payable in arrears on
the third Business Day of each Financial Quarter in respect of the immediately preceding Financial Quarter,
and on the Maturity Date (the foregoing fees to be payable (x) in Canadian Dollars, with respect to Letters of
Credit denominated in Canadian Dollars. (y) in U.S. Dollars, with respect to Letters of Credit
denominated in U.S. Dollars), and (z) in the applicable currency of any Letter of Credit
denominated in a currency other than Canadian Dollars or U.S. Dollars.
(2)The applicable Borrower shall pay to the Fronting Letter of Credit Lender its (i)
set-up fees, cable charges and other customary miscellaneous charges in respect of the issue
of Letters of Credit by it; and (ii) documentary and administrative charges for amending,
transferring or drawing under, as the case may be, Letters of Credit of a similar amount, term
and risks upon the amendment or transfer of each Letter of Credit and each drawing made
thereunder (the foregoing fees to be payable (x) in Canadian Dollars, with respect to Letters of
Credit denominated in Canadian Dollars, (y) in U.S. Dollars, with respect to Letters of Credit
denominated in U.S. Dollars), and (z) in the applicable currency of any Letter of Credit
denominated in a currency other than Canadian Dollars or U.S. Dollars.
Section 4.07Obligations Absolute.
Subject to Section 4.04(5), the obligation of the applicable Borrower to reimburse the
Fronting Letter of Credit Lender for drawings made under the Letters of Credit issued by it shall
be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including:
(1)any lack of validity or enforceability of any Letter of Credit;
(2)the existence of any claim, compensation, set-off, defence or other right which the
applicable Borrower may have at any time against a Beneficiary or any transferee of any Letter
of Credit (or any Persons for whom any such transferee may be acting), the Fronting Letter of
Credit Lender or any other Person, whether in connection with this Agreement, the transactions
contemplated herein and therein or any unrelated transaction (including any underlying
transaction between any Tucows Group Entity or any Ting Fiber Group Entity and the
Beneficiary of any Letter of Credit);
(3)any draft, demand, certificate or any other document presented under any Letter
of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect;
(4)any other circumstances or happenings whatsoever, which are similar to any of
the foregoing; or
(5)that a Default or an Event of Default shall have occurred and be continuing.
Section 4.08Indemnification; Nature of Fronting Letter of Credit Lender’s Duties.
In addition to amounts payable as elsewhere provided in this Article 4, the applicable Borrower hereby agrees
to protect, indemnify, pay and save the Fronting Letter of Credit Lender harmless from and against any and
all claims or losses (including reasonable legal fees and expenses) which the Fronting Letter of Credit Lender
may incur or be subject to as a consequence, direct or indirect, of (A) the application for or issuance of or
drawing under any Letter of Credit, other than as a result of the gross negligence or wilful misconduct of the
Fronting Letter of Credit Lender as determined by a court of competent jurisdiction, provided that the Fronting
Letter of Credit Lender acts in good faith; or (B) the failure of the Fronting Letter of Credit Lender to honour a
drawing under any Letter of Credit as a result of any act or
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omission, whether rightful or wrongful, of any present or future Governmental Entity prohibiting
the payment of such drawing (all such acts or omissions herein called “Government Acts”).
(6)As between the applicable Borrower and the Fronting Letter of Credit Lender, the
applicable Borrower assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit issued by the Fronting Letter of Credit Lender, by the Beneficiary of such Letter of Credit.
Except to ensure compliance with the applicable Letter of Credit, the Fronting Letter of Credit
Lender shall not have any responsibility for (A) the form, validity, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the application for,
issuance of or drawing under any Letter of Credit (even if it should in fact prove to be in any or
all respects invalid, inaccurate, fraudulent or forged); (B) the validity or sufficiency of any
instrument transferring or assigning (or purporting to transfer or assign) any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (C) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise (whether
or not they are in cipher); (D) errors in interpretation of technical terms; (E) any loss or delay in
the transmission or otherwise of any document required in order to make a drawing under any
Letter of Credit or of the proceeds thereof; (F) the misapplication by the Beneficiary of any
Letter of Credit or of the proceeds of any drawing under such Letter of Credit; and (G) any
consequences arising from causes beyond the control of the Fronting Letter of Credit Lender
including any Government Acts. None of the above shall affect, impair, or prevent the vesting of
any of the Fronting Letter of Credit Lender’s powers hereunder. Any action taken or omitted by
the Fronting Letter of Credit Lender under or in connection with any Letter of Credit issued by it
or the related certificates if taken or omitted in good faith, shall not put the Fronting Letter of
Credit Lender under any resulting liability to the applicable Borrower provided that the Fronting
Letter of Credit Lender acts without intentional or gross fault and has not engaged in wilful
misconduct.
(7)The applicable Borrower shall have no obligation to indemnify the Fronting Letter
of Credit Lender in respect of any liability incurred by the Fronting Letter of Credit Lender to the
extent determined by a final non-appealable judgment of a court of competent jurisdiction to
have been caused by the gross negligence or wilful misconduct of the Fronting Letter of Credit
Lender, or out of the wrongful dishonour by the Fronting Letter of Credit Lender of a proper
demand for payment made under any Letter of Credit issued by it.
Section 4.09Repayments.
(1)If the applicable Borrower shall be required to repay the Accommodations
Outstanding under the Credit Facility pursuant to Article 2 or Article 9, then the applicable
Borrower shall pay to the Fronting Letter of Credit Lender, to the extent required pursuant
thereto and in the amount provided therein, an amount equal to the Fronting Letter of Credit
Lender’s contingent liability in respect of any Letter of Credit outstanding hereunder, including
any Letter of Credit which is the subject matter of any order, judgment, injunction or other such
determination (a “Judicial Order”) restricting payment by the Fronting Letter of Credit Lender
under and in accordance with such Letter of Credit beyond the expiration date stated therein
other than any Judicial Order permanently enjoining the Fronting Letter of Credit Lender from
paying under such Letter of Credit. Payment in respect of each such Letter of Credit shall be
due in the currency in which such Letter of Credit is denominated.
The Fronting Letter of Credit Lender shall, with respect to any Letter of Credit issued by it, upon the date on
which any final and non-appealable order, judgment or other
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such determination has been rendered or issued either terminating the applicable Judicial Order
or permanently enjoining the Fronting Letter of Credit Lender from paying under such Letter of
Credit, pay to the applicable Borrower an amount equal to the aggregate of (y) the difference
between the amount paid to the Fronting Letter of Credit Lender pursuant to Section 4.09(1)
and the amounts paid by the Fronting Letter of Credit Lender under such Letter of Credit, and
(z) interest on such amount, if any, determined at the Fronting Letter of Credit Lender’s
applicable wholesale deposit rate for the relevant currency.
(2)The Fronting Letter of Credit Lender shall, with respect to any Letter of Credit
issued by it, upon the earlier of (A) the date on which either (x) the original counterpart of such
Letter of Credit is returned to the Fronting Letter of Credit Lender for cancellation, or (y) the
Fronting Letter of Credit Lender is released by the Beneficiary from any further obligations in
respect thereof; and (B) the expiry (to the extent permitted by Law) of such Letter of Credit, pay
to the Borrowers an amount equal to the aggregate of (y) the difference between the amount
paid to the Fronting Letter of Credit Lender pursuant to Section 4.09(1) and the amounts paid
by the Fronting Letter of Credit Lender under such Letter of Credit, and (z) interest on such
amount, if any, determined at the Fronting Letter of Credit Lender’s applicable wholesale
deposit rate for the relevant currency.
Section 4.10Cash Collateral.
(1)At any time that there shall exist a Defaulting Lender, within three (3) Business
Days following the receipt by the applicable Borrower of written request of the Agent or any
Fronting Letter of Credit Lender (with a copy to the Agent) the applicable Borrower shall Cash
Collateralize such Fronting Letter of Credit Lender’s Fronting Exposure with respect to such
Defaulting Lender (determined after giving effect to Section 2.15(1)(iv) and any Cash Collateral
provided by such Defaulting Lender) in an amount not less than the Minimum Collateral
Amount.
(2)The applicable Borrower, and to the extent provided by any Defaulting Lender,
such Defaulting Lender, shall grant to the Agent, for the benefit of the applicable Fronting Letter
of Credit Lender, and agrees to maintain, a first priority security interest in all such Cash
Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of
the applicable Borrower’s Letter of Credit Obligations, to be applied pursuant to clause (3)
below. If at any time the Agent reasonably determines that Cash Collateral is subject to any
right or claim of any Person other than the Agent and the applicable Fronting Letter of Credit
Lender as herein provided, or that the total amount of such Cash Collateral is less than the
applicable Minimum Collateral Amount, the applicable Borrower will, promptly upon demand by
the Agent, pay or provide to the Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting
Lender).
(3)Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section 4.10 or Section 2.13 in respect of Letters of Credit shall
be applied to satisfy the Defaulting Lender’s obligation to fund participations in respect of Letter
of Credit Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any
interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any
other application of such property as may otherwise be provided for herein.
Cash Collateral (or the appropriate portion thereof) provided to reduce any Fronting Letter of Credit Lender’s
Fronting Exposure shall no longer be required to be held as
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Cash Collateral pursuant to this Section 4.10 (and shall be returned to the applicable Borrower
within three (3) Business Days) following (i) the elimination of the applicable Fronting Exposure
(including by the termination of Defaulting Lender status of the applicable Lender whether by a
cure of such status in accordance with Section 2.15(2) or by removal of such Lender pursuant
to Section 2.16), or (ii) the determination by the Agent and the applicable Fronting Letter of
Credit Lender that there exists excess Cash Collateral; provided that the Person providing Cash
Collateral and the applicable Fronting Letter of Credit Lender may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other obligations and provided
further that to the extent that such Cash Collateral was provided by the applicable Borrower,
such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan
Documents.
ARTICLE 5
SECURITY/GUARANTEES
Section 5.01Security.
The Loan Parties have provided to the Agent, for and on behalf of the Secured Parties
as continuing collateral security for the present and future indebtedness and liability of the Loan
Parties to the Secured Parties hereunder and under the other Loan Documents, in each case,
to the extent specified in the applicable documents relating to such security, the following
security in form and substance satisfactory to the Agent acting reasonably, together with any
relevant power of attorney, registrations, filings and other supporting documentation and
opinions of counsel as requested by the Agent or its counsel (acting reasonably) (together with
the security required pursuant to this Agreement or otherwise delivered in connection with this
Agreement or the other Loan Documents from time to time, the “Security”):
(i)a full recourse guarantee from each of the Borrowers and each other
Subsidiary that becomes a Guarantor hereunder;
(ii)a general pledge and security agreement (or local law equivalent,
including moveable hypothec to the extent any of the Loan Parties has
any tangible Assets or is domiciled in the Province of Quebec)
constituting a first-ranking charge on all personal property and assets of
each of the Loan Parties (including a pledge in respect of all Equity
Interests held by a Loan Party in the capital of any Subsidiary thereof, in
each case, together with all certificates (if any) evidencing such
ownership and stock transfer powers in respect of same), subject, if and
to the extent applicable, to any Permitted Lien, the exceptions specified
therein and other customary exceptions (each such agreement, a
“Pledge and Security Agreement”);
in respect of any Intellectual Property of the Loan Parties registered with, or with respect to which an
application (other than any United States trademark applications constituting Excluded Assets) for registration
is pending with, the United States Patent and Trademark Office, the United States Copyright Office or the
Canadian Intellectual Property Office, a customary intellectual property security agreement in respect thereof
governed by the laws of New York or Ontario, as applicable;
(iii)appropriate evidence showing first loss payable and additional insured
clauses or endorsements with respect to the applicable property and third
party liability insurance policies of each Loan Party in favour of the Agent;
and
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(iv)other security consistent with the foregoing which may be required in any
applicable jurisdiction to effect the registration and perfection of any of
the foregoing.
Section 5.02Additional Guarantors.
The Loan Parties shall ensure that the Adjusted EBITDA of the Loan Parties at all times
represents at least 85% of the consolidated Adjusted EBITDA of the Parent and its Subsidiaries
(excluding the Ting Fiber Group) (in each case for the relevant Rolling Period in respect of
which the Agent and the Lenders have received a Compliance Certificate hereunder). The
Parent shall cause such additional Subsidiaries of the Parent to become Guarantors hereunder
and provide the other Security required herein as may be necessary to comply with the
foregoing requirements.
Section 5.03Mortgaged Property.
Each Loan Party shall, provide and maintain with the Agent, for and on behalf of the
Secured Parties no later than ninety (90) days after the Closing Date or promptly upon the
acquisition thereof, as applicable, a registered first priority debenture/hypothec (subject to
Permitted Liens) in respect of any Material Owned Real Property owned on the Closing Date or
acquired thereafter (the owned real/immoveable property so subject to such debentures/
hypothecs at any time is herein referred to as the “Mortgaged Property”), together with an
opinion of Borrowers’ counsel with respect thereto, an ALTA lender’s title insurance policy
insuring such debenture/hypothec, a current ALTA survey, certified to Agent by a licensed
surveyor, a certificate from a national certification agency indicating whether such Mortgaged
Property is located in a special flood hazard area, an environmental audit and any other item
reasonably necessary in order to obtain any of the foregoing in form and substance reasonably
acceptable to Agent.
Section 5.04Obligations Secured by the Security.
The documents constituting the Security shall secure the present and future indebtedness, obligations and
other liabilities of each of the applicable Loan Parties specified therein to the Secured Parties under the Loan
Documents to which such Loan Party is a party, including the Other Secured Obligations and excluding the
Excluded Swap Obligations (the “Secured Obligations”) and all such Secured Obligations shall rank pari
passu with each other and any proceeds from any realization of the Collateral shall be applied to the Secured
Obligations rateably in accordance with Section 9.03 (whether such Collateral is in the name of the Agent or
in the name of any one or more of the Lenders, the Service Lenders or Hedge Lenders and without regard to
any priority to which any Lender, the Service Lenders or Hedge Lender may otherwise be entitled under
applicable law). Notwithstanding the rights of the Hedge Lenders and the Service Lenders to benefit from the
Security, all decisions concerning the Security and the enforcement thereof shall be made by the Lenders or
the Majority Lenders in accordance with this Agreement and the other Loan Documents. No Hedge
Lender or
Service Lender shall have any additional right to influence the Security or the enforcement
thereof as long as this Agreement remains in force.
(3)The Eligible Hedging Agreements shall not cease to be secured except in
accordance with the terms of such agreements or with the prior written consent of the Lead
Swap Arranger. If the Accommodations Outstanding have been indefeasibly paid and
performed in full in cash and this Agreement and the Commitments have been terminated, the
Lead Swap Arranger, the Hedge Lenders and the Service Lenders will release their interest in
the Security upon receiving collateral to secure the present or future obligations under their
respective Eligible Hedging Agreement or Other Secured Agreements, as applicable, in an
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amount and on terms satisfactory to the Lead Swap Arranger or such Service Lenders, acting
reasonably (or as otherwise provided in the applicable Eligible Hedging Agreement or Other
Secured Agreement) and such Secured Obligations shall continue to rank pari passu with each
other and such collateral shall be applied rateably to such Secured Obligations (and decisions
concerning the Security shall be made by the Lead Swap Arranger and the Service Lenders as
they may determine among themselves). The provisions of this Section 5.04(2) shall survive the
termination of this Agreement and the repayment of the Accommodations Outstanding. In
addition and for greater certainty, as between the Agent and the Lenders only, the Lead Swap
Arranger shall not be responsible for monitoring or verifying the outstanding obligations under
Eligible Hedging Agreements from time to time, and for monitoring or verifying the priority and
effectiveness of the Liens securing the Eligible Hedging Agreement obligations. The Agent shall
not be responsible for monitoring or verifying outstanding Eligible Hedging Agreement
obligations or for monitoring or verifying the effectiveness, or rank or priority of any Liens
securing Eligible Hedging Agreement obligations. Each Hedge Lender shall be responsible for
making its own verification and monitoring in this regard.
Section 5.05Further Assurances.
Each of the Loan Parties agrees that it will from time to time at its expense duly
authorize, execute and deliver or cause to be duly authorized, executed and delivered to the
Agent such further instruments and documents and take such further action within its control as
the Agent may reasonably request for the purpose of obtaining or preserving the full benefits
granted or intended to be granted to the Agent by the Loan Documents (other than Eligible
Hedging Agreements or Other Secured Agreements) and of the rights and remedies therein
granted to the Agent, including the filing of financing statements or other documents under any
applicable Law with respect to the Liens created thereby. Each of the Loan Parties
acknowledges that the Loan Documents have been prepared on the basis of applicable Law
and the corporate structure and capitalization of the Loan Parties in effect on the date thereof,
and that changes to applicable Law or the corporate structure and capitalization of the Loan
Parties may require the execution and delivery of different forms of documentation, and
accordingly the Agent shall have the right (acting reasonably) to require that the Loan
Documents (other than Eligible Hedging Agreements or Other Secured Agreements) be
amended, supplemented or replaced (and the Parent shall duly authorize, execute and deliver
(or cause to be authorized, executed and delivered) to the Agent any such amendment,
supplement or replacement reasonably requested by the Agent with respect to any of the Loan
Documents (other than Eligible Hedging Agreements or Other Secured Agreements)) within five
(4)Business Days of presentation of reasonable drafts thereof (i) to reflect any change in
applicable Law or the corporate structure and capitalization of the Loan Parties; (ii) to facilitate the creation
and registration of appropriate forms of security in applicable jurisdictions; or (iii) to
confer upon the Agent Liens similar to the Liens created or intended to be created by the Loan
Documents.
Section 5.06Security Principles
Notwithstanding anything to the contrary, the Collateral shall exclude the following: (i)
(A) any owned and leased real/immoveable property other than Material Owned Real Property;
(ii) any governmental licenses or state or local franchises, charters or authorizations, to the
extent a security interest in any such licenses, franchise, charter or authorization would be
prohibited or restricted thereby (including any legally effective prohibition or restriction, but
excluding any prohibition or restriction that is ineffective under the PPSA or the UCC (or similar
regulation in any applicable jurisdiction)), (iii) pledges and security interests prohibited by
applicable Law (including any legally effective requirement to obtain the consent of any
Governmental Entity), (iv) Margin Stock and, to the extent prohibited by, or creating an
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enforceable right of termination in favor of any other party thereto under (other than the Loan
Parties or any of their Affiliates), the terms of any applicable organizational documents, joint
venture agreement or shareholders’ agreement, equity interests in any Person other than
Wholly-Owned Subsidiaries, (v) Assets to the extent a security interest in such Assets would
result in material adverse tax consequences as reasonably determined by the Parent in
consultation with the Agent, (vi) any intent-to-use United States trademark application for which
an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c)
or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15
U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and
Trademark Office, but solely to the extent, if any, that, and solely during the period, if any, in
which the grant of a security interest therein would impair the validity or enforceability of any
registration that issues from such intent-to-use application under applicable federal law, (vii) any
lease, license or other agreement in respect of personal property (including pursuant to a
purchase money security interest or similar arrangement) and the property subject to such
lease, license or agreement to the extent that a grant of a security interest therein would violate
or invalidate such lease, license or agreement (or purchase money arrangement) or create a
right of termination in favor of any other party thereto (other than any Tucows Group Entity)
after giving effect to the applicable anti-assignment provisions of the PPSA or the UCC (or
similar regulation in any applicable jurisdiction) or other similar applicable law, other than
proceeds and receivables thereof, the assignment of which is expressly deemed effective under
the PPSA or the UCC (or similar regulation in any applicable jurisdiction) or other similar
applicable Law notwithstanding such prohibition, and (viii) other assets agreed to by the
Majority Lenders in writing. The Collateral may also exclude those Assets as to which the Agent
and the Parent reasonably agree in writing that the cost of obtaining such a security interest or
perfection thereof are excessive in relation to the benefit to the Secured Parties of the security
to be afforded thereby (the foregoing described in the previous two sentences are collectively
referred to as the “Excluded Assets”).
In addition, (a) no control agreements or other perfection actions shall be required with respect to any
securities accounts or commodities accounts covered by Section 8.01(17), (b) no perfection actions shall be
required with respect to letter of credit rights, except to the extent constituting a supporting obligation for
other Collateral as to which perfection is accomplished solely by the filing of a PPSA or UCC financing
statement (or similar filing in any applicable jurisdiction) (it being understood that no actions shall be
required to perfect a security interest in letter of credit rights, other than the filing of a PPSA or UCC
financing statement (or similar filing in any applicable jurisdiction)), and (c) no perfection actions shall be
required with respect to motor vehicles and other assets subject to certificates of title with a value not in
excess of
$100,000 each and commercial tort claims with a value not in excess of $500,000 each other
than the filing of a PPSA or UCC financing statement (or similar filing in any applicable
jurisdiction).
ARTICLE 6
CONDITIONS OF LENDING
Section 6.01Conditions Precedent to Effectiveness.
The effectiveness of this Agreement is subject to the following conditions precedent
being satisfied on or prior to the date of this Agreement:
(1)execution and delivery of this Agreement by the Loan Parties, the Agent and each
of the Lenders;
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(2)the Agent shall have received a copy (certified by an authorized officer of the
applicable Loan Party) of (i) the charter documents and by-laws (or equivalent) of each Loan
Party; (ii) the resolutions of the board of directors (or equivalent governing body) of each Loan
Party approving the borrowing and other matters contemplated by this Agreement; and (iii) all
other instruments evidencing necessary corporate or other action of each Loan Party with
respect to such matters;
(3)the Agent shall have received a certificate of a senior officer of each Loan Party
certifying the names and true signatures of its officers authorized to sign this Agreement and
the Loan Documents to which it is a party;
(4)the Agent shall have received a certificate of status, compliance, good standing or
like certificate, if applicable, with respect to each Loan Party issued by the appropriate
Governmental Entity in the jurisdiction of its incorporation or formation;
(5)the Agent shall have received favourable opinions of counsel to the Loan Party in
the jurisdiction of incorporation of such entity (if applicable) and each other relevant jurisdiction
covering such matters relating to the Loan Party as the Agent shall reasonably request;
(6)receipt by the Agent and the Lenders of a Compliance Certificate calculating the
financial covenants specified in Section 8.03 herein on a pro forma basis and evidencing
compliance by the Parent therewith (using Adjusted EBITDA and Interest Expense for last
twelve months ending June 30, 2023 including Funded Debt as of the date hereof);
(7)without limiting Section 6.02, the Agent and the Lenders shall have received a
certificate of an officer of the Loan Parties certifying (i) that all of the representations and
warranties, except where made only as of an earlier date, of the Loan Parties herein are true
and correct on and as of the Closing Date, and (ii) that no Default or Event of Default has
occurred and is continuing or would result from the closing of the transactions contemplated by
this Agreement;
all reasonable and documented out-of-pocket fees and expenses (including the reasonable legal fees and
disbursements of legal counsel) payable under or in connection with this Agreement shall have been paid in
full;
(8)receipt by the Lenders of the most recent Financial Quarter unaudited
consolidated financial statements of the Tucows Group and Ting Fiber Group on a
Consolidated Basis;
(9)no litigation shall directly or indirectly affect any Tucows Group Entity other than
litigation which could not reasonably be expected to result in a Material Adverse Change;
(10)the Agent and the Lenders shall be satisfied with the organizational and capital
structure of the Tucows Group and Ting Fiber Group as at the Closing Date;
(11)the Agent and the Lenders shall be satisfied that, since June 30, 2023, there has
not been a Material Adverse Change and they shall be satisfied with the disclosure of the
Borrowers and other Loan Parties material contingent obligations since such date;
(12)the Agent shall have received a satisfactory payout letter duly executed by each of
Royal Bank of Canada, as agent, in respect of the existing credit facility in favour of certain of
the Loan Parties, along with total discharges of, or an undertaking to discharge, any and all
security interests related to such facilities previously filed against of the Loan Parties;
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(13)all documents and instruments shall have been properly registered, recorded and
filed in all places which, searches shall have been conducted in all jurisdictions which, and
deliveries of all consents, approvals, acknowledgments, undertakings, directions,
postponements, subordinations (including in respect of shareholder debt), non-disturbance
agreements, control agreements, estoppel letters or certificates, negotiable documents of title
and other documents and instruments to the Agent shall have been made which, in the opinion
of the Lenders’ counsel, are necessary to make effective the Security created or intended to be
created by the Loan Parties pursuant to the Loan Documents and to ensure the perfection and
the intended first ranking priority (subject to Permitted Liens) of the Security;
(14)the Agent shall have received evidence of the receipt by the Loan Parties of all
necessary consents and approvals required from any creditor, Governmental Entity or other
Person for the entry into, execution and delivery of the Loan Documents and the performance
of their obligations thereunder, satisfactory to the Agent, acting reasonably;
(15)the Agent and the Lenders shall have received a satisfactory certificate of
insurance issued by the Loan Parties’ insurance broker in respect of all policies maintained by
the Loan Parties which are, in the case of liability insurance, to name the Agent as an additional
insured, mortgagee (or first mortgagee in such jurisdictions where it is conventional to indicate
the rank of such interest) and, in the case of property insurance (excluding accounts receivable
insurance), loss payee (or first loss payee in such jurisdictions where it is conventional to
indicate the rank of such interest), in Canada and the United States and in other jurisdictions
where it is customary to do so in the relevant jurisdiction in which the Loan Party has an
insurance policy;
the Agent and the Lenders shall have completed to their satisfaction a due diligence review of the Tucows
Group, the Ting Fiber Group and the property, assets and undertakings of each Tucows Group Entity and
Ting Fiber Group Entity, including all financial, environmental, legal, know-your-client and anti-money
laundering due diligence; and
(16)receipt by the Agent of any additional disclosure, documents or information that
may be reasonably requested by the Agent or the Lenders.
Section 6.02Conditions Precedent to All Accommodations and Conversions.
(1)The obligation of each Lender to make Accommodations or otherwise give effect
to any Accommodation Notice hereunder shall be subject to the conditions precedent being
satisfied on or prior to the date of such Accommodation Notice and Accommodation, and
immediately after giving effect thereto and to the application of any proceeds therefrom:
(i)the conditions set forth in Section 6.01 have been fulfilled;
(ii)all of the representations and warranties of the Borrowers herein are true
and correct in all material respects on and as of such date as though
made on and as of such date (except where made only as of an earlier
date or as disclosed to and accepted by the Majority Lenders prior to
such date);
(iii)the Agent and the Lenders shall be satisfied that, since the date of the
most recently delivered Compliance Certificate, there has not been a
Material Adverse Change;
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(iv)no event or condition shall have occurred and be continuing, or result
from such Accommodation or giving effect to such Accommodation
Notice, which constitutes a Default or an Event of Default; and
(v)the making of such Accommodation hereunder will not violate any
applicable Law then in effect.
(2)Each of the giving of any Accommodation Notice by a Borrower and the
acceptance by a Borrower of any Accommodation shall be deemed to constitute a
representation and warranty by the Borrowers that, on the date of such Accommodation Notice
or Accommodation, as the case may be, and after giving effect thereto and to the application of
any proceeds therefrom, the statements set forth in Section 6.02(1) are true and correct (except
as disclosed to and accepted by the Majority Lenders prior to such date).
Section 6.03No Waiver.
The terms and conditions of Section 6.01 and Section 6.02 are inserted for the sole benefit of the Lenders
and the Agent, with the consent of the Majority Lenders, may waive them in whole or in part, with or without
terms or conditions, in respect of any extension of credit, without prejudicing their right to assert them in
whole or in part in respect of any other extension of credit. The making of an Accommodation or otherwise
giving effect to any Accommodation Notice hereunder, without the fulfilment of one or more conditions set
forth in Section 6.01 or Section 6.02, as applicable, shall not constitute a waiver of any such condition with
respect to any subsequent Accommodation Notice or Accommodation, and the Lenders reserve the right to
require fulfilment of such condition in connection with any subsequent Accommodation Notice or
Accommodation.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Section 7.01Representations and Warranties.
Each of the Loan Parties represents and warrants to the Agent and the Lenders, and
the Parent represents and warrants to the Agent and the Lenders for and on behalf of itself and
each Tucows Group Entity (other than the Loan Parties), acknowledging and confirming that
the Agent and each Lender is relying thereon without independent inquiry in entering into this
Agreement and providing Accommodations hereunder, that:
(1)Existence and Standing. Each Tucows Group Entity is a corporation, company,
partnership or other entity, as the case may be, incorporated or organized and subsisting under
the laws of its jurisdiction of incorporation or organization and has all requisite corporate or
other constitutional power and authority to own, hold under licence or lease its property,
undertaking and Assets and to carry on (i) its business; and (ii) the transactions contemplated
by this Agreement and each other Loan Document to which it is a party.
(2)Corporate Power. Each Loan Party has all requisite corporate, partnership or
other constitutional power and authority to enter into and perform its obligations under this
Agreement and each other Loan Document to which it is a party, and to do all acts and things
and execute and deliver all other documents and instruments as are required hereunder or
thereunder to be done, observed or performed by it in accordance with the terms hereof and
thereof.
(3)Conflict with Other Instruments. The execution and delivery by each Loan Party
and the performance by it of its obligations under, and compliance with the terms, conditions
and provisions of, this Agreement and each other Loan Document to which it is a party will not
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conflict with or result in a breach of any of the terms, conditions or provisions of (i) its articles,
memoranda or articles of association, by-laws, partnership agreement, shareholders’
agreement or other organizational documents applicable to it, as the case may be; (ii) any
applicable Law; (iii) any Material Contract, Material Authorization or any material contractual
restriction (including, for the avoidance of doubt, any indenture, mortgage or charge) binding on
or affecting it or its Assets; or (iv) any material judgment, injunction, determination or award
which is binding on it, in each such case except to the extent that such breach would not
reasonably be expected to result in a Material Adverse Change.
(4)Corporate Action, Governmental Approvals, etc. The execution and delivery by
each Loan Party of this Agreement and each of the Loan Documents to which it is a party, and
the performance by it of its obligations thereunder have been duly authorized by all necessary
corporate, company, partnership or other action including, without limitation, the obtaining of all
necessary shareholder, partnership or other material and relevant consents. No authorization,
consent, approval, registration, qualification, designation, declaration or filing with any
Governmental Entity or other Person, is or was necessary in connection with the execution and
delivery of and performance each Loan Party of its obligations under this Agreement and the
other Loan Documents to which it is a party, except such as are in full force and effect,
unamended at the date hereof or where failure to obtain same would not reasonably be
expected to have a Material Adverse Change.
Due Execution; Validity and Enforceability; Defaults. This Agreement and each other Loan Document to
which any Loan Party is a party has been duly executed and
delivered, as the case may be, by the Loan Party which is a party thereto and constitutes a
legal, valid and binding obligation, enforceable against it in accordance with its terms (except as
such enforceability may be limited by the availability of equitable remedies and the effect of
bankruptcy, insolvency or similar laws affecting the enforcement of creditor’s rights generally),
is (or will be immediately upon the execution thereof by such Person) in full force and effect,
and the applicable Loan Party has performed and complied in all material respects with all the
terms, provisions, agreements and conditions set forth herein and therein and required to be
performed or complied with by it.
(5)Authorizations, etc. All Authorizations of each Tucows Group Entity which are
necessary to properly conduct their respective business as of the Closing Date are in full force
and effect and no Tucows Group Entity is in default with respect thereto, except where the
absence of such Authorization, the failure to maintain such Authorization in full force and effect,
or the default thereunder would not reasonably be expected to result in a Material Adverse
Change. The Material Authorizations described in Schedule 7.01(6) or as hereafter disclosed
pursuant to Section 8.01(3)(iii)Section 8.01(3)(iv) in the Compliance Certificate required to be
delivered pursuant to Section 8.01(2)(iii)(B) hereof are the only Authorizations necessary to
properly conduct the business of the Tucows Group, the absence of which would reasonably be
expected to result in a Material Adverse Change (it being understood that this representation
will not be deemed breached pending the timely disclosure of any such subsequently obtained
Material Authorizations).
(6)Litigation and Other Proceedings. Except as otherwise set forth on Schedule
7.01(7), as at the date hereof there is no litigation, arbitration, claim, dispute (whether labour,
industrial or otherwise), governmental investigation, proceeding or inquiry pending or, to its
knowledge, threatened against or affecting any each Tucows Group Entity which would
reasonably be expected to result in a Material Adverse Change.
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(7)Ownership of Assets. Except as otherwise set forth on Schedule 7.01(8), each
Tucows Group Entity has good and marketable title to its Assets, in each case free and clear of
all Liens other than Permitted Liens.
(8)Subsidiaries, etc. As of the date hereof, no Person has any right or option to
purchase or otherwise acquire any of the issued and outstanding Equity Interests of any
Tucows Group Entity. Each of the Borrowers is a Wholly-Owned Subsidiary of the Parent, other
than the Parent and other than in the case of Wavelo, Inc. as a result of the issuance of
common stock of Wavelo, Inc. pursuant to the Wavelo Stock Option Plan.
(9)Ownership/Lease of Real Property. Except as set forth on Schedule 7.01(10),
the Loan Parties do not own or lease any real property as at the date hereof.
(10)Place of Business. As at the date hereof, the only jurisdictions (or registration
districts within such jurisdictions) in which any Loan Party has any place of business or stores
any tangible personal property with a realizable value in excess of $500,000 are set out in
Schedule 7.01(11).
(11)No Default Under this Agreement. No Default or Event of Default has occurred
and is continuing under this Agreement or any other Loan Documents.
Material Contracts. As at the date hereof, no Tucows Group Entity is a party or otherwise subject to or
bound or affected by any Material Contract, except as set out in
Schedule 7.01(13). Except as set forth in Schedule 7.01(13), at the date hereof, all Material
Contracts are in full force and effect, and no Tucows Group Entity or any other party to any
such agreement, is in material default with respect thereto. Notwithstanding the foregoing, the
Agent and the Loan Parties acknowledge and agree that the Tucows Group Entities shall enter
into a renegotiation, termination or sale of the Verizon Agreement which renegotiation,
termination or sale (as applicable) shall be completed by no later than December 31, 2026, or
such other date as may be agreed to by the Agent in writing.
(12)Compliance with Other Legal Obligations. No Tucows Group Entity is in
violation of any judgment or decree, relating in any way to it, to the present operation of its
business or to its Assets, the breach or violation of which would reasonably be expected to
result in a Material Adverse Change.
(13)Taxes. Each Tucows Group Entity has filed all federal, and provincial, state, local
and other material tax returns which, to its knowledge, are required to be filed and has paid all
Taxes due pursuant to such returns or pursuant to any material assessment received by each
such Tucows Group Entity except such Taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided. The charges, accruals and reserves on the
books of each Tucows Group Entity in respect of any material Taxes or other governmental
charges are adequate. All information provided in such tax returns pertaining to each Tucows
Group Entity is true, complete and accurate in all material respects. The charges, accruals and
reserves on the books of each Tucows Group Entity in respect of any Taxes or other
governmental charges payable for the current or prior year which are not yet due are materially
adequate to the extent that such Tucows Group Entity is aware of them. No tax returns of any
Tucows Group Entity are currently being audited by any applicable Governmental Entity and
any assessments or threatened assessments otherwise outstanding to any material extent. No
Tucows Group Entity has received any notice of assessment of material additional Taxes or any
other claim of notice of any nature whatsoever that any material Tax or additional material Tax is
due which has not been paid or otherwise finally settled or satisfied. Except as otherwise set
forth on Schedule 7.01(15), there are no matters involving any Tucows Group Entity under
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discussion with any Governmental Entity relating to any material Taxes asserted by any such
body. No Tucows Group Entity has executed or filed with any Governmental Entity any
agreement, waiver or other document extending or having the effect of extending the period for
assessment, reassessment or collection of any material Taxes or the filing of any tax returns, in
each case, which is still in effect.
(14)Financial Statements/Other Information. The financial statements which have
been provided to the Agent pursuant to this Agreement are complete in all material respects,
and fairly present the consolidated financial condition and business operations of the parties to
which they relate in all material respects, as at the date thereof and (subject to Section 8.02(6))
are prepared in accordance with GAAP (subject, in the case of any interim financial statements,
to normal year-end adjustments and the absence of footnotes). No written information, exhibit
or report furnished by any Tucows Group Entity or Ting Fiber Group Entity to the Agent or the
Lenders for use in connection with the transactions contemplated by this Agreement or any of
the other Loan Documents contains any material misstatement of fact or omits to state a
material fact or any fact necessary to make the statement contained therein not materially
misleading in the circumstances in which it was made.
Compliance with Laws. (i) Each Tucows Group Entity and the operation of their respective business and
Assets, are in compliance with all applicable Laws; and (ii) the business and other assets of each Tucows
Group Entity is in compliance with all Environmental
Laws, and possess and are operated in compliance with all Environmental Permits which are
required under all applicable Environmental Laws for the operation of such business and
Assets, in each case of clause (i) and (ii), where such non-compliance or non-possession would
reasonably be expected to result in a Material Adverse Change. To the knowledge of the
Tucows Group Entities, each Tucows Group Entity’s business and Assets are not subject to any
fact, condition or circumstance that could result in any liability under any Environmental Laws
which would reasonably be expected to result in a Material Adverse Change.
(15)Canadian Pension Plans. Schedule 7.01(18) sets forth a complete list and
description of all Canadian Pension Plans established or maintained by the Tucows Group as at
the date hereof. No Tucows Group Entity has ever had any Canadian Pension Plan and, for
greater certainty, no Tucows Group Entity has a Canadian Defined Benefit Pension Plan.
Except as would not reasonably be expected to result in a Material Adverse Change:
(i)No Tucows Group Entity has made any promises of benefit
improvements under any Canadian Pension Plan and, in any event, no
such improvements will result in a solvency deficiency or going concern
unfunded liability in the applicable Canadian Defined Benefit Pension
Plan;
(ii)all the material obligations of each Tucows Group Entity (including
fiduciary, funding, investment and administration obligations) required to
be performed in connection with the Canadian Pension Plans and the
funding agreements therefore have been performed in a timely fashion;
and
(iii)there have been no improper withdrawals or applications of the assets of
any Canadian Pension Plan.
ERISA. Each Plan, if any, is in compliance in all material respects with the applicable provisions of ERISA,
the Code and other U.S. federal or state laws. Except as would not reasonably be expected to result in a
Material Adverse Change, (i) each Plan, if any, which is intended to be a qualified plan under Section 401(a)
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of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under
Section 401(a) of the Code and the trust related thereto is exempt from federal income tax under Section
501(a) of the Code or an application for such a determination is currently being processed by the Internal
Revenue Service; (ii) each Tucows Group Entity and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA and Section 412 of the Code in
respect of each Pension Benefit Plan, if any, and each Pension Benefit Plan, where applicable, is in
compliance with Sections 412, 430 and 436 of the Code and Sections 206(g), 302 and 303 of ERISA, without
regard to waivers and variances; (iii) the current value of the assets of each Pension Benefit Plan exceeds
the present value of the accrued benefits and other liabilities of such Plan and neither any Tucows Group
Entity nor any member of the Controlled Group knows of any facts or circumstances which would materially
change the value of such assets and accrued benefits and other liabilities; (iv) neither any Tucows Group
Entity nor any member of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a “prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code; (v)
no ERISA Event has occurred or is reasonably expected to occur; and (vi) neither any Loan Party nor any
member of the Controlled Group maintains or is required to contribute to any Welfare Plan which provides
health, accident or life insurance benefits to former
employees, their spouses or dependents, other than in accordance with Section 4980B of the
Code.
(16)Environmental Matters.
(i)No Tucows Group Entity has knowledge of any claim or has received any
notice of any claim, and no proceeding has been instituted raising any
claim against any Tucows Group Entity or any of their respective real
properties now or formerly owned, leased or operated by any of them or
other assets, alleging any damage to the Environment or violation of any
Environmental Laws, except, in each case, as such would not reasonably
be expected to result in a Material Adverse Change.
(ii)No Tucows Group Entity has knowledge of any facts, conditions or
circumstances which would reasonably be expected to give rise to any
claim, public or private, of violation of Environmental Laws or damage to
the Environment emanating from, occurring on or in any way related to
real properties now or formerly owned, leased or operated by any of them
or to other assets or their use, except, in each case, as such would not
reasonably be expected to result in a Material Adverse Change.
(iii)To the knowledge of each Tucows Group Entity, no such Tucows Group
Entity has used, generated, transported, treated or stored any Hazardous
Materials on real properties now or formerly owned, leased or operated
by any of them or has Disposed of or Released any Hazardous Materials
in a manner in violation of any Environmental Laws in each case in any
manner that would reasonably be expected to result in a Material Adverse
Change.
(iv)To the best of the knowledge of each Tucows Group Entity, all buildings
on all real properties now owned, leased or operated by such Tucows
Group Entity are in compliance with applicable Environmental Laws and
possess and are operated in compliance with all Environmental Permits
which are required under all applicable Environmental Laws for the
operation of such business and Assets, except where failure to comply
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would not reasonably be expected to result in a Material Adverse
Change.
(17)Insurance. The Tucows Group maintains insurance (including business
interruption insurance, property insurance and general liability insurance) with responsible
insurance carriers and in such amounts and covering such risks as have been determined by
the Tucows Group to be appropriate and prudent in the circumstances.
(18)Material Adverse Change. Since the date of the most recent financial statements
delivered to the Agent, there has occurred no event or development which has resulted in or
which would reasonably be expected to result in a Material Adverse Change.
Intellectual Property. Schedule 7.01(23) sets forth a complete list and a description at the date hereof of all
material and registered, or applications for registration of, Owned Intellectual Property of the Loan Parties
used in the business of each of the Loan Parties. Each Tucows Group Entity owns such Owned Intellectual
Property free and clear of
any Liens (other than Permitted Liens). Each Tucows Group Entity owns or licenses all
Intellectual Property required to be able to carry on its business and all such licenses are in full
force and effect except where the failure to own or licence such Intellectual Property or to
maintain such licenses in full force and effect would not reasonably be expected to result in a
Material Adverse Change.
(19)Validity and Priority of Security. The Security constitutes assignments, fixed
and specific mortgages and charges, floating charges or other Liens, as applicable, on the
undertaking and property and assets of each Loan Party purported to be assigned, mortgaged,
charged or subjected to a Lien thereby, and ranks in priority to any other Lien upon such
undertaking and property and assets other than Permitted Liens.
(20)Labour Matters. There is no existing or, to the knowledge of the Parent,
threatened strike, lock-out or other dispute relating to any collective bargaining agreement to
any Tucows Group Entity which would reasonably be expected to result in a Material Adverse
Change. Schedule 7.01(25) contains a list of collective bargaining agreements to which each
Loan Party is a party at the date hereof.
(21)Solvency. On the Closing Date, after giving effect to the Accommodations
hereunder, the Tucows Group, on a Consolidated Basis, is Solvent and each Loan Party, is
Solvent.
(22)Margin Stock. No Tucows Group Entity is engaged, nor will it engage, principally
or as one of its important activities, in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect. No part of the proceeds of any Accommodations
will be used for “purchasing” or “carrying” “margin stock” as defined in Regulation U of such
Board of Governors. No portion of the Secured Obligations is secured directly or indirectly by
Margin Stock.
(23)Anti-Corruption. Each Tucows Group Entity and each Ting Fiber Group Entity is
in material compliance with all Anti-Corruption Laws. Each Tucows Group Entity and each Ting
Fiber Group Entity has implemented and maintains in effect policies and procedures designed
to ensure compliance by each Tucows Group Entity, each Ting Fiber Group Entity and their
respective directors, officers, employees and agents with Anti-Corruption Laws. No Tucows
Group Entity or Ting Fiber Group Entity has made a payment, offering, or promise to pay, or
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authorized the payment of, money or anything of value (a) in order to assist in obtaining or
retaining business for or with, or directing business to, any foreign official, foreign political party,
party official or candidate for foreign political office, (b) to a foreign official, foreign political party
or party official or any candidate for foreign political office, and (c) with the intent to induce the
recipient to misuse his or her official position to direct business wrongfully to such Tucows
Group Entity or Ting Fiber Group Entity or to any other Person, in violation of any
Anti-Corruption Laws.
(24)Anti-Terrorism; Anti-Money Laundering.
No Tucows Group Entity or Ting Fiber Group Entity is in violation of any Anti-Terrorism Laws, including
Executive Order on Terrorist Financing issued by the President of the United States on September 24, 2001
(the “Executive Order”), the USA PATRIOT Act, the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada), and any
sanctions administered or enforced by the U.S. Department of State,
Public Safety Canada, the United Nations Security Council, the European
Union, or His Majesty’s Treasury.
(i)The Parent, for and on behalf of each Tucows Group Entity (other than
the Loan Parties) and each Ting Fiber Group Entity, and each Loan Party
represents and warrants that (i) no Covered Entity is a Sanctioned
Person, and (ii) no Covered Entity, either in its own right or, to any Loan
Party’s knowledge after due inquiry, through any third party, (A) has any
of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B)
does business in or with, or derives any of its income from investments in
or transactions with, any Sanctioned Country or Sanctioned Person in
violation of any Anti-Terrorism Law; or (C) engages in any dealings or
transactions prohibited by any Anti-Terrorism Law.
(ii)No Tucows Group Entity, Ting Fiber Group Entity or any broker or other
agent of any Tucows Group Entity or Ting Fiber Group Entity acting or
benefiting in any capacity in connection with the Credit Facilities is any of
the following (any such Person being referred to herein as a “Designated
Person”):
(1)a Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;
(2)a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the
provision of the Executive Order;
(3)a Person with which the Agent or any Lender is prohibited from
dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;
(4)a Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or
(5)a Person that is named as a “specially designated national and
blocked person” on the most current list published by OFAC at
its official website or any replacement website or other
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replacement official publication of such list or comparable
designation under any sanctions administered or enforced by the
U.S. Department of State, Public Safety Canada, the United
Nations Security Council, the European Union, or His Majesty’s
Treasury.
No Tucows Group Entity, Ting Fiber Group Entity or any broker or other agent of any Tucows Group Entity or
Ting Fiber Group Entity acting in any capacity in connection with the Credit Facility (i) conducts any business
or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any
Designated Person above,
(ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order,
or (iii) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(25)Tax Jurisdiction. The Canadian Borrower is a resident of Canada for purposes of
the Income Tax Act (Canada) and each U.S. Borrower is a “U.S. person” as defined in Section
7701(a)(30) of the Code.
(26)Investment Company Act. No Tucows Group Entity is an “investment company”
or a company “controlled” by an “investment company” (as each such term is defined or used in
the Investment Company Act of 1940 (United States)) nor to is any Tucows Group Entity
registered or required to be registered under the Investment Company Act of 1940 (United
States).
(27)85% Threshold Test. The Adjusted EBITDA of the Loan Parties represents at
least 85% of the consolidated Adjusted EBITDA of the Tucows Group on a Consolidated Basis.
Section 7.02Survival of Representations and Warranties.
The representations and warranties herein set forth or contained in any certificates or
documents delivered to the Agent pursuant hereto shall not merge in or be prejudiced by and
shall survive any Accommodation hereunder and shall continue in full force and effect (as of the
date when made or deemed to be made) so long as any amounts are owing by any of the
Borrowers to the Agent or the Lenders hereunder or the Agent or any Lenders has any
obligation under this Agreement.
ARTICLE 8
COVENANTS OF THE BORROWER
Section 8.01Affirmative Covenants.
So long as any amount owing hereunder remains unpaid or the Agent or any Lender
has any obligation under this Agreement and unless consent is given in accordance with
Section 8.02(3) hereof, each of the Loan Parties shall, and shall cause the Tucows Group to:
(1)Payment of Obligations. Duly and punctually pay or cause to be duly and
punctually paid to the Lenders all amounts payable under this Agreement and the other Loan
Documents at the times and places, in the currencies and in the manner mentioned herein and
therein.
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(2)Financial Reporting Requirements. Prepare (where applicable, and in
accordance with GAAP) and deliver to the Agent:
(i)as soon as available and in any event within 45 days after the end of
each Financial Quarter in each Financial Year:
copies of the quarterly unaudited financial statements of the Tucows Group and Ting Fiber Group on a
Consolidated Basis,
including a balance sheet, statement of income and cash flow
statement; and
(A)copies of the unconsolidated quarterly financial statements of the
Tucows Group, including a balance sheet, statement of income
and cash flow statement with a management discussion and
analysis in respect of any material variances between the actual
results to date and the projections contained in the most recent
Annual Business Plan presented to the Agent and the Lenders,
in each case, all prepared in accordance with GAAP (subject to
year-endadjustmentsandexcludingfootnotes)andstatingin
comparative form the respective consolidated figures as of the end of and
for the corresponding period in the previous Financial Year, and certified
by a senior financial officer of the Parent to the effect that the statements
present fairly, in all material respects, the consolidated financial position
of such Person and its subsidiaries as of the end of such Financial
Quarter and the related consolidated results of operations and changes in
financial position for such Financial Quarter in accordance with GAAP,
consistently applied (subject to year-end adjustments and excluding
footnotes);
(ii)as soon as available and in any event within 120 days after the end of
each Financial Year:
(A)copies of the
(1)audited consolidated financial statements of the Tucows
Group and Ting Fiber Group prepared on a Consolidated
Basis as of the end of such applicable Financial Year;
(2)copies of the audited consolidated financial statements of
the Ting Fiber Group prepared on a Consolidated Basis as
of the end of such applicable Financial Year; and
in each case, prepared in accordance with GAAP and stating in
comparative form the respective consolidated figures as of the
end of and for the previous Financial Year, and accompanied by a
report thereon of independent chartered professional accountants
of recognized national standing in the United States (without a
“going-concern” or like qualification or exception and otherwise
without any qualification as to the scope of such audit) to the
effect that the consolidated financial statements present fairly, in
all material respects, the consolidated financial position of such
Person and its subsidiaries as of the end of such Financial Year
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and the consolidated results of the operations and changes in
financial position for such Financial Year in conformity with GAAP
consistently applied;
in respect of the Tucows Group, an annual specified procedures report  prepared  by  independent 
chartered  professional
accountants of recognized national standing in the United States
(without any impermissible qualifications), providing confirmation
of the accuracy of the reported information in the unconsolidated
financial statements of Tucows Group within 120 days of fiscal
year end, prepared in conformity with GAAP consistently applied;
(iii)a Compliance Certificate:
(A)concurrently with the financial statements furnished pursuant to (i)
and (ii) above, duly executed by a senior officer or other qualified
officer of the Parent, demonstrating compliance with the financial
covenants in Section 8.03 hereof, a management discussion and
analysis in respect of any material variances between the actual
results to date and the projections contained in the most recent
Annual Business Plan presented to the Agent and the Lenders;
and
(B)as soon as available and in any event within forty-five (45) days
after the end of each Financial Quarter in each Financial Year,
duly executed by a senior officer or other qualified officer of the
Parent, including an income statement, and demonstrating
compliance with the financial covenants in Section 8.03 hereof;
and
(iv)not less than forty-five (45) days after the commencement of each
Financial Year, the Annual Business Plan for such Financial Year.
(3)Additional Reporting Requirements. Deliver to the Agent:
(i)as soon as practicable after any Tucows Group Entity becomes aware of
the occurrence of each Default or Event of Default, a statement of a
senior officer of the Parent setting forth the details of such Default or
Event of Default and the action which the Parent proposes to take or
have taken with respect thereto;
(ii)promptly after any Tucows Group Entity or Ting Fiber Group Entity
becomes aware of the occurrence of a default by Ting Fiber, LLC under
any Existing Parent Guarantee or the underlying agreement to which any
Existing Parent Guarantee relates or there is a demand on any Existing
Parent Guarantee, a statement of a senior officer of the Parent setting
forth the details of such default or demand, as applicable, and the action
which the Parent proposes to take or have taken with respect thereto;
(iii)(ii) promptly, and in any event within ten (10) days after any Loan Party
receives notice of or becomes aware of any suit, proceeding or similar
action commenced or threatened by any Governmental Entity or other
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Person which, if determined adversely, would reasonably be likely to
result in a Material Adverse Change;
(iii) promptly, and in any event within ten (10) days after any Loan Party receives notice of or becomes aware
of any cancellation or non-renewal
of any Material Authorizations or any other licences, permits or other
regulatory approvals (other than non-renewals in the ordinary course of
business) where such cancellation or non-renewal is reasonably likely to
result in a Material Adverse Change;
(iv)(iv) notification of any notice received from, or other action taken by or
proposed to be taken by, any creditor (other than Lenders) of any of the
Loan Parties which would reasonably be expected to result in a Material
Adverse Change;
(v)(v) together with each Compliance Certificate, written notice of any
previously undisclosed Subsidiaries of the Parent, any new Material
Authorizations or Material Contracts, any cancellation or termination of
any Material Authorization or Material Contract, any default or event of
default under any Material Authorization or Material Contract of which the
Parent has knowledge, any additional material and registered, or
applications for registration of, Owned Intellectual Property of any
Tucows Group Entity used in the business of any Tucows Group Entity,
any additional Material Owned Real Property or Material Leased Real
Property of any Tucows Group Entity, any jurisdiction not identified in
Schedule 7.01(11) in which any Tucows Group Entity has any place of
business or stores any tangible personal property with a realizable value
in excess of $500,000 (or the Equivalent Amount in any other currency),
and any other Investment by any Tucows Group Entity in any Person
other than a Guarantor and the amount of any such Investments;
(vi)together with each Compliance Certificate, an update on the Ting Fiber
Group businesses and financial performance of each, until such time as
the Ting Fiber Group has been sold in their entirety and on Ting Inc. until
the Verizon Liabilities are terminated;
(vii)(vi) together with each Compliance Certificate, notification of Eligible
Hedging Agreements entered into by any Loan Party;
(viii)(vii) as soon as practicable, any change in the Financial Year of the
Parent;
(ix)(viii) as soon as practicable after any senior officer of any Loan Party
becomes aware of any change in any Loan Party’s named executive
officers as required to be disclosed to the SEC;
(x)(ix) upon becoming aware of the occurrence thereof, provide notice
(including the nature of the event and, when known, any action taken or
threatened by any Governmental Entity with respect thereto) of any
Canadian Pension Termination Event, and provide the notices required
by Section 8.01(18);
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(x) upon becoming aware of the occurrence thereof, notification of the occurrence of a Reportable
Compliance Event;
(xi)(xi) as soon as practicable after any senior officer of any Loan Party
becomes aware of the discharge by any Loan Party of its present public
accounting firm or any withdrawal or resignation by such public
accounting firm; and
(xii)(xii) such other information respecting the condition, operations, financial
or otherwise, of the business of any Loan Party as the Agent may from
time to time reasonably request.
(4)Corporate Existence, Ownership of Subsidiaries. Preserve and maintain in full
force and effect its corporate, partnership or other existence, organization and status in good
standing and maintain in full force and effect all requisite corporate capacity, power and
authority to become and remain duly qualified, registered and licensed to (i) carry on its
business in each jurisdiction in which such qualification, registration or license is necessary for
the proper conduct of its business and operations, (ii) own, hold under licence or lease its
properties in each jurisdiction in which such qualification, registration or license is necessary for
the proper conduct of its business and (iii) carry out the transactions contemplated by the Loan
Documents to which it is a party, in each case of clause (i), (ii) and (iii), to the extent that a
failure to do so could reasonably be expected to result in a Material Adverse Change.
(5)Compliance with Laws, etc. Comply with the requirements of all applicable Laws
(including Environmental Laws and applicable Laws relating to any U.S. Pension Plan and
Canadian Pension Plan) except where such non-compliance would not reasonably be expected
to result in a Material Adverse Change.
(6)Conduct of Business and Maintenance of Properties. Carry on the Business.
Conduct its business in a prudent manner and consistent with good business practices.
Maintain and preserve all of its respective Assets in all material respects in good repair, working
order and condition (other than ordinary wear and tear) and in material compliance with all
applicable Laws (except where failure to so comply would not reasonably be expected to have a
Material Adverse Change) and, from time to time, make all needful and proper repairs,
renewals, replacements, additions and improvements thereto, so that the Business may be
properly conducted at all times in accordance with prudent business management, provided
that this Section shall not prevent any Loan Party from discontinuing, in whole or in part, the
operation or the maintenance of any of its properties if such discontinuance is desirable in the
conduct of the Business and the Loan Party has concluded that such discontinuance would not
reasonably be expected to result in a Material Adverse Change or a Default or Event of Default.
(7)Books and Records. Keep proper books of account and records in accordance
with sound and consistent accounting practices, its constating documents and all applicable
Laws, covering all of its business and affairs on a current basis.
(8)Payment of Taxes and Claims and Withholdings.
Pay and discharge, before the same shall become delinquent, (A) all Taxes, assessments and governmental
charges or levies imposed upon it or upon its Assets; and (B) all lawful Claims which, if unpaid, might by Law
become a Lien (other than a Permitted Lien) upon its Assets, save and except when and so long as the
validity of any such Taxes, rates, fees, dues, levies, assessments or imposts is being contested in good
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faith by appropriate proceedings and adequate reserves are being
maintained in accordance with GAAP.
(i)Withhold from each payment made to any of its past or present
employees, officers, directors, partners, and to any non-resident of the
country in which it is resident, the amount of all Taxes and other
deductions required to be withheld and pay the amount withheld to the
proper tax or other receiving officers within the time required under any
applicable Law.
(ii)Collect from all Persons the amount of all Taxes required to be collected
from them and remit the amount collected to the proper tax or other
receiving officers within the time required under any Applicable Law.
(9)Cure Defects. Promptly upon having knowledge thereof, cure or cause to be
cured any defects in the execution and delivery of any of the Loan Documents or any of the
other agreements, instruments or documents contemplated thereby or executed pursuant
thereto or any defects in the validity or enforceability of any of the Loan Documents and
execute and deliver or cause to be executed and delivered all such agreements, instruments
and other documents as the Agent may consider reasonably necessary or desirable for the
foregoing purposes.
(10)Property Insurance. Cause all of its property and assets to be insured and kept
insured against loss or damage in such amounts and with such deductibles as are in
accordance with good business practice and as the Agent may reasonably require, with
financially sound and reputable insurers. Pay all premiums necessary for such purpose as the
same shall become due and provide particulars of all such policies and all renewals thereof to
the Agent upon written request. Add or cause each of the Loan Parties to add the Agent, on
behalf of the Secured Parties, as lender loss payee as its interest may appear under such
property insurance policies, together with a customary mortgage endorsement on terms
satisfactory to the Agent and the Lenders, acting reasonably. Furnish to the Agent, on written
request, and in any event annually, confirmation that such insurance is carried and current. All
policies must provide the Agent with at least thirty (30) days prior written notice of cancellation
thereof.
(11)Liability Insurance. Maintain public liability and other liability insurance in such
amounts as are in accordance with good business practice and as the Agent may reasonably
require, with financially sound and reputable insurers and to pay or cause to be paid all
premiums necessary for such purpose as the same shall become due and provide particulars of
all such policies and all renewals thereof to the Agent upon request. Add or cause each of the
Loan Parties to add the Agent, on behalf of the Secured Parties, as additional insured as its
interest may appear under such liability insurance policies. Furnish to the Agent, on written
request, and in any event annually, confirmation that such insurance is carried and current. All
policies must provide the Agent with at least thirty (30) days prior written notice of cancellation
thereof.
Use of Proceeds of Accommodations. Use the proceeds of Accommodations hereunder for the purposes
specified in Section 2.03, and not use or permit any proceeds of any Accommodation to be used, either
directly or indirectly, (i) for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying”
any Margin Stock or repaying or otherwise refinancing any Funded Debt of any Loan Party or any other
Person incurred to
purchase or carry any Margin Stock, or (ii) in violation of any applicable antibribery, sanctions
and/or corruption laws and regulations.
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(12)Authorizations, Intellectual Property. Except as contemplated by Schedule
8.01(13), maintain (i) any Material Authorizations in good standing, and (ii) except as
contemplated by Section 7.01(23), any Owned Intellectual Property in the name of any Tucows
Group Entity, except in each case where the failure to do so would not reasonably be expected
to result in a Material Adverse Change.
(13)Environmental. Will:
(i)use and operate all of its facilities and properties in compliance with all
Environmental Laws, keep all necessary Environmental Permits in effect
and remain in material compliance therewith, and handle all Hazardous
Materials in compliance with all applicable Environmental Laws and keep
all facilities and properties free and clear of all Liens arising under
Environmental Laws, except, in each case, to the extent the failure to do
so would not reasonably be expected to have a Material Adverse
Change;
(ii)promptly upon becoming aware of the same, notify the Agent and take all
necessary action available to it in order to promptly comply and have
dismissed any actions and proceedings relating to non-compliance with
Environmental Laws which, if adversely determined, would reasonably be
expected to have a Material Adverse Change; and
(iii)to the extent consistent with reasonable and prudent environmental
remediation standards or to the extent required by Environmental Law,
promptly investigate and remediate any Release of any Hazardous
Materials at any of its facilities or properties except where failure to so
respond, remove or remedy would not reasonably be expected to have a
Material Adverse Change.
(14)Inspections. Permit the Agent and its representatives and consultants to visit and
inspect any of its Assets, to, subject to applicable privacy Laws and to documents reasonably
determined by the Parent and its counsel to be subject to solicitor/client privilege, examine its
books and records and to make copies and take extracts therefrom, and to discuss its affairs,
finances and accounts with the senior officers thereof or (following the occurrence of an Event
of Default and in the presence of the Parent’s personnel) the Parent’s independent auditors, all
at such reasonable times as the Agent may reasonably request upon reasonable prior notice to
the Parent by the Agent up to two (2) times per year provided that no Event of Default has
occurred and is continuing; provided that prior to the occurrence of an Event of Default which is
continuing any such visits, inspections, examinations and discussions shall be at the sole cost
and expense of the Agent after the first such visit in each Financial Year.
Protect Security Interests. Except for the filing of renewal or financing change statements and the making
of other filings by the Agent and the Lenders as secured party or assignee, at all times take all action and
supply the Agent and the Lenders with all information that they may reasonably request as necessary to
maintain the Security as valid and perfected first ranking Security charging the Assets covered thereby,
subject to Permitted Liens.
(15)Maintenance of Bank Accounts and Service Accounts. Each of the Loan
Parties’ bank accounts are set forth on Schedule 8.01(17) hereof (which schedule shall be
deemed automatically updated by delivery of any Compliance Certificate that sets forth
changes in the bank accounts of the Loan Parties). Each Loan Party shall maintain all of its
bank accounts and Service Agreements with one or more of the Lenders or Affiliates thereof;
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provided that any Tucows Group Entity may maintain bank accounts with an aggregate balance
of up to $2,500,000 at any one time with banks and financial institutions other than the Lenders
and their respective Affiliates.
(16)ERISA. Each Loan Party shall, and shall cause each of its subsidiaries and
members of its Controlled Group to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could reasonably be
expected to result in the imposition of a Lien against any of its property securing an amount in
excess of $250,000 or the U.S. Dollar Equivalent thereof. Each Loan Party shall, and shall
cause each of its Subsidiaries and each member of its Controlled Group to, promptly notify the
Agent of: (a) the occurrence of any ERISA Event, except for ERISA Events that would not
reasonably be expected to result in a Material Adverse Change, (b) the occurrence of any event
with respect to any Plan which would result in the incurrence by any Loan Party or any of its
Subsidiaries of any material liability, fine or penalty, or (c) any material increase in the
contingent liability of any Loan Party or any of its Subsidiaries with respect to any post
retirement Welfare Plan benefit.
(17)Canadian Pension Plans.
(i)Except as would not reasonably be expected to result in a Material
Adverse Change:
(A)For each existing, or hereafter adopted, Canadian Pension Plan,
each Loan Party shall, in a timely fashion, comply with and
perform all of its material obligations under and in respect of such
Canadian Pension Plan, including under any funding agreements
and all applicable laws (including any fiduciary, funding,
investment and administration obligations); and
(B)All employer or employee payments, contributions or premiums
required to be remitted, paid to or in respect of each such
Canadian Pension Plan shall be paid or remitted by each Loan
Party in a timely fashion and in accordance with the terms thereof
(including any funding agreements and all applicable laws) and in
no event shall a Loan Party permit to exist any accumulated
funding deficiency, whether or not waived, with respect to any
Canadian Pension Plan.
(ii)Except as would not reasonably be expected to result in a Material
Adverse Change, each Loan Party shall not, with respect to any hereafter
adopted Canadian Pension Plan:
(A)terminate any Canadian Defined Benefit Pension Plan; or
acquire an interest in any Person if such Person sponsors, maintains or contributes to any “multi-employer
plan” as such term
is defined in subsection 8500(1) of the Income Tax Regulations
(Canada).
(18)KYC and Other Similar Information. Upon request by a Lender, provide and/or
deliver such “know your client” and other documents as they may reasonably request in
connection with applicable AML Legislation (including a Beneficial Ownership Certification in
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relation to any Loan Party that qualifies as a “legal entity customer” under the Beneficial
Ownership Regulation) or similar information as may be reasonably requested by such Lender.
(19)Post-Closing Undertaking. Perform and satisfy to the satisfaction of the Agent
and its counsel the requirements (the “Post-Closing Undertaking”) listed in Schedule 8.01(21)
on or before the date by which such Post-Closing Undertaking is required to be performed
pursuant thereto. The Agent, by instrument in writing and without any consent from any of the
Lenders, may, in its sole and absolute discretion, extend any deadline for completion of the
Post-Closing Undertaking.
(20)Further Assurances. At its cost and expense, duly execute and deliver and cause
each of the other Loan Parties to duly execute and deliver, upon request by the Agent, such
further instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of the Agent to carry out more effectually the provisions and
purposes of the Loan Documents.
Section 8.02Negative Covenants.
So long as any amount owing hereunder remains unpaid or the Agent or any Lender
has any obligation under this Agreement, and unless consent is given in accordance with
Section 18.01 hereof, each of the Loan Parties shall not and shall cause the Tucows Group not
to:
(1)Debt. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Funded Debt other than Permitted Funded Debt.
(2)Liens. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Lien on any of its Assets, other than Permitted
Liens.
Disposition of Assets. Directly or indirectly sell or otherwise dispose of , or permit any of its Subsidiaries to
sell or otherwise dispose of, any of its Assets, except that any Tucows Group Entity may: (i) sell or transfer
Assets to any other Loan Party; (ii) sell or dispose of Assets in an aggregate amount per annum of not more
than $22,500,000, provided that the Net Proceeds of any sale or disposition of Assets in excess of
$12,500,000 are subject to compliance with Section 2.06(1) hereof (to the extent applicable), (iii) sell
inventory and immaterial assets in the ordinary course of business, (iv) Dispose of obsolete, surplus or
worn-out property in the ordinary course of business; (v) sell or Dispose of machinery or equipment no longer
used or useful in the business of any Loan Party; and (vi) Dispose of property to the Borrowers or any
Guarantor.; and (vii) complete the Ting Fiber Group Sale in accordance with the terms of the Ting Fiber
Group Sale Purchase Documents, provided that the Ting Fiber Group Sale shall be completed by no later
than March 31, 2027 or such later date as may be agreed to by the Agent in writing.
(3)Payments of Non-Arm’s Length Debt. Make any payments or repayments of
principle or interest on account of any Indebtedness owing to any Person (other than any
Tucows Group Entity or Ting Fiber Group Entity (and in the case of any Ting Fiber Group Entity
or any Tucows Group Entity which is not a Loan Party, subject to compliance with Section
8.02(6)(iv)) not dealing at arm’s length or with any shareholder of any Loan Party, without the
prior written consent of the Majority Lenders, which consent may be withheld in the Majority
Lenders’ sole discretion, other than as permitted under this Agreement or the associated
intercreditor or subordination agreement to which the Agent is a party.
(4)Guarantees. Become obligated under, or permit any of its Subsidiaries to become
obligated under, guarantees or other financial assistance except: (i) guarantees which comprise
part of the Security; (ii) guarantees in respect of Permitted Funded Debt incurred by a Tucows
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Group Entity; (iii) unsecured guarantees incurred by a Tucows Group Entity in the ordinary
course of business; (iv) in respect of the obligations of any Loan Party; (iv) unsecured
guarantees incurred by a Tucows Group Entity in respect of the obligations of a Ting Fiber
Group Entity or a Tucows Group Entity (other than a Loan Party) incurred after the Third
Amendment Closing Date not to exceed guaranteed obligations in an amount of $500,000 per
guarantee and $5,000,000 in the aggregate, which have been disclosed to the Agent in writing
with an explanation of the obligations guaranteed and the course of business to which the
guarantee relates; (v) Investments permitted pursuant to Section 8.02(6). ; and (vi) the
guarantees in respect of the obligations incurred by a Ting Fiber Group Entity in effect on the
Third Amendment Closing Date listed on Schedule 8.02(5), provided that each guarantee listed
on Schedule 8.02(5) remains unsecured at all times (the “Existing Parent Guarantees”).
(5)Investments. Make or acquire any Investments, except that the following
Investments may be made or acquired if both immediately before and immediately after each
such Investment no Default or Event of Default has occurred and is continuing:
(i)Permitted Acquisitions, provided that (i) the Total Funded Debt to
Adjusted EBITDA Ratio is less than 3.75: 1 (both before and after giving
effect to any such Permitted Acquisition), or (ii) such Permitted
Acquisitions are domain-hosting related Acquisitions that do not exceed
an aggregate purchase price of $1,000,000 in any Financial Year;
(ii)Investments in another Loan Party;
(iii)Investments (other than Investments of Material IP) in a Subsidiary of the
Parent that is not a Loan Party or Investments in any other Person, in
each case, provided that the aggregate amount of all Investments made
by a Loan Party in Subsidiaries of the Parent that are not Loan Parties or
in any other Person does not at any time exceed $5,000,000 in
aggregate;
(iv)Investments in cash or Cash Equivalents;
loans and advances to officers, directors, or employees of any Loan Party in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an aggregate amount not to exceed $250,000
at any time outstanding; and
(v)the Ting Fiber Investment and any other Investments by any Loan Party
in (i) any Ting Fiber Group Entity; or (ii) any Tucows Group Entity which is
not a Loan Party in an aggregate amount not to exceed $50,000,000 over
any three (3) year period or $30,000,000 in any twelve (12) month period,
in each case, so long as (A) no Default or Event of Default has occurred
and is continuing or would result therefrom, (i) in an unlimited amount at
any time that theB) the sum of cash and undrawn availability under the
Credit Facilities is greater than $20,000,000 at the time such Investment
is made and immediately after giving effect to such Investment, and (C)
Total Funded Debt to Adjusted EBITDA Ratio is less than 2.00:1 (both
before and3.50:1.00 at the time such Investment is made and
immediately after giving effect to any such Investment and any Funded
Debt incurred in connection therewith); (ii) in an amount not to exceed
$7,500,000 during any 12 month period at any time that the Total Funded
Debt to Adjusted EBITDA Ratio is less than 2.50:1 but greater than or
equal to 2:00:1 (both before and after giving effect to any such
Investment and any Funded Debt incurred in connection therewith); and
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(iii) such Investments shall not be permitted at any time that the Total
Funded Debt to Adjusted EBITDA Ratio is greater than or equal to
2.50:1..
(6)Capital Expenditures. Incur Capital Expenditures, except that the following
Capital Expenditures may be incurred if both immediately before and immediately after each
such Capital Expenditure no Default or Event of Default has occurred and is continuing: Capital
Expenditures in any Financial Year in a maximum aggregate amount of not more than 115% of
the forecasted Capital Expenditures set out in the Annual Business Plan submitted by the
Parent to the Agent and the Lenders in respect of such Financial Year. For greater certainty, the
Data Centre Purchase Transaction shall not constitute a Capital Expenditure for the purposes
of calculating the cap on Capital Expenditures under this Section 8.02(7).
(7)Distributions. Make any Distributions, including, but not limited to, any payments
of any dividends, except as follows:
(i)the Tucows Group may make Distributions to any Loan Party;
(ii)the Tucows Group may make payments of any dividends which have
been consented to in writing by the Majority Lenders;
so long as no Default or Event of Default has occurred and is continuing or would result therefrom, Share
Repurchases in respect of the Parent’s Equity Interests, (A) in an amount not to exceed $5,000,000 during
any 12 month period at any time that the Total Funded Debt to Adjusted EBITDA Ratio is greater than or
equal to 3.75:1 but less than 4.00:1 (both before and after giving effect to any such Share Repurchase), (B) in
an amount not to exceed $10,000,000 during any 12 month period at any time that the Total Funded Debt to
Adjusted EBITDA Ratio is greater than or equal to 3.00:1 but less than or equal to 3.75:1 (both before and
after giving effect to any such Share Repurchase), (CB) in an amount not to exceed $15,000,000 during any
12 month period at any time that the Total Funded Debt to Adjusted EBITDA Ratio is greater than or equal to
2.00:1 but less than 3.00:1 (both before and after giving effect to any
such Share Repurchase), and (DC) in an amount not to exceed
$40,000,000 during any 12 month period at any time that the Total
Funded Debt to Adjusted EBITDA Ratio is less than 2.00:1 (both before
and after giving effect to any such Share Repurchase), provided that, at
all times, Share Repurchases shall not exceed the lesser of (x) the
Parent’s EBITDA for the then applicable Financial Year, and (y) 25% of
the then current market capitalization of the Parent; and
(iii)so long as no Default or Event of Default has occurred and is continuing
or would result therefrom, purchases of common stock of Wavelo, Inc.
issued pursuant to the Wavelo Stock Option Plan, (a) at any time that the
Total Funded Debt to Adjusted EBITDA Ratio is less than 2.00:1 (both
before and after giving effect to any such share repurchases and any
Funded Debt incurred in connection therewith) or (b) at any time that the
Total Funded Debt to Adjusted EBITDA Ratio is equal to or greater than
2.00:1 (both before and after giving effect to any such share repurchases
and any Funded Debt incurred in connection therewith), in an aggregate
amount not to exceed $1,000,000 in any Financial Year.
(8)Corporate Changes. MateriallyOther than the Ting Fiber Group Sale (provided
that the Ting Fiber Group Sale has been completed by no later than March 31, 2027, or such
later date as agreed to by the Agent in writing), materially change, nor permit any of its
Subsidiaries to materially change, the nature of its business consummate, nor permit any of its
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Subsidiaries to consummate, any Division/Series Transaction; or enter into, nor permit any of its
Subsidiaries to enter into, or any transaction whereby all or a substantial portion of its property
would become the property of any other Person, whether by way of reconstruction,
reorganization, recapitalization, consolidation, amalgamation, merger, transfer, sale or
otherwise, without the prior written consent of the Majority Lenders; except that any of the
foregoing transactions may take place among any Tucows Group Entity (and no other Persons)
if prior written notice is given to the Agent, a Material Adverse Change will not occur as a result,
and any applicable Tucows Group Entity concurrently provide such additional or replacement
Security as the Agent may reasonably require.
(9)Business Changes. Carry on or engage in business substantially different than
the Business or any business related or incidental thereto.
(10)Anti-Terrorism Laws. Not (and shall cause each of its Subsidiaries (including, for
greater certainty, the Ting Fiber Group Entities) not to) directly or indirectly, (a) knowingly
conduct any business or engage in making or receiving any contribution of funds, goods or
services to or for the benefit of any Designated Person, (b) knowingly deal in, or otherwise
engage in any transaction relating to, any property or interests in property blocked pursuant to
any Anti-Terrorism Law, (c) knowingly repay any amount owing hereunder with any funds
derived from any unlawful activity with the result that the making of the Accommodations would
be in violation of law, or (d) knowingly engage in or conspire to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law and the Borrowers shall deliver to the Lenders,
any certification or other evidence requested from time to time by the Lenders in their
reasonable discretion, confirming compliance with this Section 8.02(11).
Anti-Corruption Laws. Not (and shall cause each of its Subsidiaries (including, for greater certainty, the
Ting Fiber Group Entities) not to) directly or, to any Loan Party’s
knowledge, indirectly, use the proceeds of the Credit Facility, or lend, contribute or otherwise
make available such proceeds to any other Person in any manner that would result in a
violation of Anti-Corruption Laws by any Person (including any Person participating in the Credit
Facility, whether as underwriter, lender, advisor, investor, or otherwise). No Tucows Group Entity
or Ting Fiber Group Entity will violate any Anti-Corruption Law in any material respect. Each
Tucows Group Entity and Ting Fiber Group Entity will maintain in effect policies and procedures
designed to ensure compliance by each Tucows Group Entity, Ting Fiber Group Entity, their
Subsidiaries and their respective directors, officers, employees, and agents with applicable Anti-
Corruption Laws.
(11)Payments in respect of Subordinated Debt. Make any payment in respect of
principal, interest, fees or any other amounts in respect of Subordinated Debt except to the
extent (if any) expressly permitted under the terms and conditions of the subordination and
postponement agreement relating thereto.
(12)Plans and Canadian Pension Plans. Not institute any new Plan or Canadian
Pension Plans without the prior written consent of the Majority Lenders.
(13)Financial Year. Change its Financial Year (which for greater certainty presently
ends on December 31st in each year), except with the prior written consent of the Majority
Lenders.
(14)Auditors. Change its auditors from its current audit firm Deloitte to a firm that is
not a nationally recognized auditing firm, except with the prior written consent of the Majority
Lenders.
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(15)Dealing with Related Parties. Other than the Management Services Agreement
and the Wavelo Stock Option Plan, enter into, or permit any of its Subsidiaries to enter into, any
contract with any Related Party outside the ordinary course of business unless the terms and
conditions thereof (specifically including the price) are commercially reasonable.
(16)Use of Advances. Use the proceeds of any Accommodation for any purposes
other than those expressly contemplated in this Agreement.
(17)New Subsidiaries. Create or acquire any Subsidiary unless (a) all of the issued
and outstanding shares in the capital of such Subsidiary are owned directly or indirectly by
Parent; and (b) subject to the terms and conditions hereof, such new Subsidiary provides a
Guarantee in respect of the Obligations and all Security required to be provided by it hereunder.
(18)Hedging Agreements. Enter into or suffer to exist, any Hedging Arrangements of
any kind, except for (i) any Eligible Hedging Agreement entered into for bona fide hedging
purposes (and not for speculative purposes), or (ii) other unsecured hedging agreements for
bona fide hedging purposes and not for speculative purposes.
Amendments to Organizational Documents/Management Services Agreement. Amend, or permit any of
its Subsidiaries to amend, (i) its organizational documents in a manner that would be prejudicial in any
material respect to the interests of the Agent or any of the Lenders under the Loan Documents other than
amendments made to the constating documents of Wavelo, Inc. to permit the Wavelo Stock Option Plan;
provided that the Parent shall not, directly or indirectly, nor shall it permit Wavelo, Inc. to, directly or indirectly,
amend the terms and conditions of the Wavelo Stock Option Plan nor the constating documents of
Wavelo, Inc. in a manner that would be prejudicial in any material respect to the interests of the
Agent or any of the Lenders under the Loan Documents except (a) with the consent of the
Agent, or (b) to the extent necessary to bring any such documents into compliance with any
applicable law or regulation, including, without limitation, for the purpose of preventing taxation
of Wavelo, any grantee or transferee under the Wavelo Stock Option Plan with respect to any
grant under the Wavelo Stock Option Plan under Section 409A of the Internal Revenue Code of
1986, as amended (provided that, with respect to amendments pursuant to clause (b), Wavelo
shall provide prior written notice of the same to the Agent); or (ii) the Management Services
Agreement that would materially reduce or postpone the payments required thereunder by the
parties thereto other than payments to be made to the Borrowers and their Subsidiaries.
(19)No Change of Name. Change its name or adopt a French form of name or
change the jurisdiction of its organization, or its place of administration or principal office or
chief executive office, in each case, without providing the Agent prior written notice thereof.
(20)Location of Assets in Other Jurisdictions. Except for property in transit in the
ordinary course of business, acquire, or permit any Guarantor to acquire, any Assets outside of
the jurisdictions identified in Schedule 7.01(11) with a value in excess of $500,000 per
jurisdiction or move any property from one jurisdiction to another jurisdiction with a value in
excess of $500,000 where the movement of such property would cause the Lien of the Security
over such property to cease to be perfected under applicable Law, or, subject to the terms and
conditions hereof, suffer or permit in any other manner any of its property with a value in excess
of $1,000,000 to not be subject to the Lien of the Security or to be or become located in a
jurisdiction as a result of which the Lien of the Security over such property is not perfected,
unless the Parent or the applicable Guarantor has executed and delivered to the Agent all
Security and all financing or registration statements in form and substance satisfactory to the
Agent which the Agent or its counsel from time to time deem necessary or advisable to ensure
that that Security constitutes a perfected first priority Lien (subject only to Permitted Liens) over
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such property notwithstanding the movement or location of such property as aforesaid together
with such supporting certificates, resolutions, opinions and other documents as the Agent may
deem necessary or desirable in connection with such security and registrations, acting
reasonably.
(21)Material IP. No Subsidiary of the Parent which is not a Guarantor shall own, or
hold exclusive rights in, any Material IP.
Section 8.03Financial Covenants.
So long as any amount owing hereunder remains unpaid or the Agent or any Lender
has any obligations under this Agreement, and unless consent is given in accordance with
Section 18.01 hereof, the Tucows Group, on a Consolidated Basis, shall:
(1)Leverage Ratio. Maintain, at all times, a Total Funded Debt to Adjusted EBITDA
Ratio of not more than 3.75:1.00 to be tested at the end of each Rolling Period.
Interest Coverage Ratio. Maintain, as at the end of each Rolling Period or any trailing twelve month period,
an Interest Coverage Ratio of not less than 3.00:1.00., to be tested at the end of each Rolling Period,
provided that, if (A) any Event of Default has occurred and is continuing under this Agreement or (B) (i) any
Existing Parent Guarantee is determined to be an on-balance sheet liability in accordance with GAAP or (ii)
a final judgement or order is issued confirming that an amount demanded under any Existing Parent
Guarantee is due and payable
by Tucows Inc., then the Interest Coverage Ratio shall be maintained at all times and tested as
frequently as required by the Lenders.
(2)Calculation of Financial Covenants. If the Total Funded Debt to Adjusted
EBITDA Ratio or the Interest Coverage Ratio are being calculated at any time after the date on
which a Tucows Group Entity has completed an Acquisition or Disposition (which term, for the
purposes of this definition, shall include any event or occurrence whereby a Tucows Group
Entity ceases to carry on business) of a division, line of business or of a Tucows Group Entity,
the amount of Adjusted EBITDA and Interest attributable to the subject of such Acquisition or
Disposition (or Funded Debt incurred or repaid in respect of such Acquisition or Disposition) to
be included, in the case of an Acquisition, or excluded, in the case of a Disposition, in
calculating such ratio will (i) in respect of Adjusted EBITDA, be calculated on a pro forma basis,
(y) in the case of an Acquisition, giving effect to the actual results of the prior owners of such
Asset; and (z) in the case of a Disposition of an Asset, the actual results of the Borrowers or
their applicable Subsidiary in respect of such Asset; and (ii) in respect of Interest Expense, be
calculated on a pro forma basis, based on the amount of Funded Debt created, incurred or
assumed by the Borrowers or their applicable Subsidiary in connection with the Acquisition of
such Asset (or repaid in connection with a Disposition), for greater certainty, in the case of each
of (i) and (ii) above as if such Asset was Acquired or Disposed of as of the first day of the
period in respect of which the calculations are being made.
ARTICLE 9
EVENTS OF DEFAULT
Section 9.01Events of Default.
If any of the following events (each an “Event of Default”) shall occur and be
continuing:
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(1)a Borrower shall fail to pay any principal amount of the Accommodations
Outstanding when such amount becomes due and payable;
(2)a Loan Party shall fail to pay any interest or Fees or any other amount when the
same become due and payable hereunder or under any other Loan Document and such failure
shall remain unremedied for three (3) Business Days;
(3)any representation or warranty or certification made or deemed to be made by or
on behalf of any Tucows Group Entity or Ting Fiber Group Entity in this Agreement or any other
Loan Document shall prove to have been incorrect in any material respect when made or
deemed to be made;
(4)a Loan Party shall fail to perform, observe or comply with any of the covenants
applicable to it contained in (i) Section 8.01(21), (ii) Section 8.02; or (iii) Section 8.03;
(5)a Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document to which it is a party and such failure shall remain
unremedied for thirty (30) days following notice thereof by the Agent to the Parent;
a Loan Party shall fail to pay any amount of the principal of or premium or interest on any Funded Debt
(excluding any Funded Debt hereunder) which is outstanding in an aggregate principal amount exceeding
$5,000,000 (or the Equivalent Amount in any other
currency), when such amount becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall continue after
the applicable grace period, if any, specified in the agreement or instrument relating to such
Funded Debt without waiver of such failure by the holder or holders of such Funded Debt on or
before the expiration of such period; or any other event shall occur or condition shall exist, and
shall continue after the applicable grace period, if any, specified in any agreement or instrument
relating to any such Funded Debt without waiver of such failure by the holder or holders of such
Funded Debt on or before the expiration of such period, if the effect of such event is to
accelerate, or permit the acceleration of such Funded Debt; or any such Funded Debt shall be
declared to be due and payable in accordance with its terms prior to the stated maturity thereof;
(6)any final judgment or order (subject to no further right of appeal) for the payment
of money in excess of $5,000,000 (or the Equivalent Amount in any other currency) which is not
covered by insurance is rendered against or in respect of any Tucows Group Entity or any of
their respective Assets and either (i) enforcement proceedings have been commenced by a
creditor upon the judgment or order, or (ii) there is any period of thirty (30) consecutive days
during which a stay of enforcement of the judgment or order, by reason of a pending appeal or
otherwise, is not in effect;
(7)a Loan Party (i) is adjudicated insolvent or generally is not able to pay its debts as
they become due; (ii) admits in writing its inability to pay its debts generally or makes a general
assignment for the benefit of creditors; (iii) institutes or has instituted against it any proceedings
seeking (A) to adjudicate it a bankrupt or insolvent, (B) liquidation, winding-up, administration,
reorganization, arrangement, adjustment, protection, release or composition of it or its Funded
Debt under any Law relating to bankruptcy, insolvency, reorganization or release of debtors
including any plan of compromise or arrangement or other corporate proceedings involving or
affecting its creditors (except to the extent permitted in Section 8.02(3)), or (C) the entry of an
order for relief or the appointment of a liquidator, receiver, trustee, administrator, custodian,
administrative receiver or other similar official for it or for any substantial part of its Assets, and
in the case of any such proceeding instituted against it (but not instituted by it), (a) such
proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or (b) such
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Loan Party, as applicable, fails to diligently and actively oppose such proceeding, or (c) any of
the relief sought in such proceeding (including the entry of an order for relief against it or the
appointment of a liquidator, receiver, trustee, custodian, administrator, administrative receiver
or other similar official for it or for any substantial part of its Assets) is given; or (iv) takes any
corporate or other action to authorize any of the above actions;
(8)if an encumbrancer shall take possession of all or a substantial part of the
property of a Loan Party (whether by appointment of a receiver, receiver and manager or
otherwise) or if a distress or execution or any similar process be levied or enforced there
against and remain unsatisfied for such period as would permit such property or such
substantial part thereof to be sold thereunder;
(9)the occurrence of a Change of Control;
(10)the occurrence of a Material Adverse Change;
any Material Contract is terminated by any party thereto in advance of its intended expiry or termination date
or becomes unenforceable, in each case, the results of which would reasonably be expected to have a
Material Adverse Change;
(11)any Material Authorization shall be revoked or not be renewed and not reinstated
within 30 days of such occurrence, in each case, the results of which would reasonably be
expected to have a Material Adverse Change; or
(12)any report of the auditors of the Parent in respect of the Financial Year end
financials statements of the Parent (or such financial statements or notes thereto) contains a
going-concern qualification or other qualification relating to the creditworthiness of the Parent
on a Consolidated Basis;
(13)any of the Loan Documents (or any Lien granted thereunder) cease to be in full
force and effect against the applicable Loan Party (except as such enforceability may be limited
by the availability of equitable remedies and the effect of bankruptcy, insolvency or similar laws
affecting the enforcement of creditor’s rights generally) and if the applicable Loan Party does
not, within fifteen (15) Business Days of receipt of written notice of such Loan Document (or
such Lien granted thereunder) not being in full force and effect, cause such Loan Document (or
such Lien granted thereunder) to be in full force and effect (except as such enforceability may
be limited by the availability of equitable remedies and the effect of bankruptcy, insolvency or
similar laws affecting the enforcement of creditor’s rights generally) or replace such Loan
Document (or Lien granted thereunder) with a new agreement (or new Lien) that is in form and
substance satisfactory to the Majority Lenders acting reasonably;
(14)the occurrence of a Canadian Pension Termination Event;
(15)there shall occur one or more ERISA Events which individually or in the aggregate
results in or might reasonably be expected to result in a Material Adverse Change; or
(16)the validity of any of the Loan Documents or the applicability thereof to the
Accommodations or any other obligations purported to be secured thereby or any material part
thereof shall be disaffirmed in writing by or on behalf of the Parent or any of the other Loan
Parties;
then, the Agent shall, at the request of the Majority Lenders, by written notice to the Borrowers
(i) terminate the Lenders’ obligations to make further Accommodations under the Credit Facility;
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(ii) (at the same time or at any time after such termination) declare the principal amount of all
outstanding Advances, an amount equal to the Face Amount of each issued Letter of Credit
and all interest and Fees accrued thereon and all other amounts payable under this Agreement
in respect of the Credit Facility and all other Secured Obligations (except for those arising
pursuant to the Eligible Hedging Agreements and Other Secured Obligations) to be immediately
due and payable, without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrowers to the extent permitted by applicable Law,
and/or (iii) exercise on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable Law; provided, that upon the occurrence
of an Event of Default under Section 9.01(8), the obligation of each Lender to make any
Accommodation shall automatically terminate, the principal amount of all outstanding
Advances, an amount equal to the Face Amount of each issued Letter of Credit and all interest
and Fees accrued thereon and all other amounts payable under this Agreement in respect of
the Credit Facility and all other Secured Obligations shall be immediately due and payable,
without presentment, demand, protest or further notice of any kind.
Section 9.02Remedies Upon Demand and Default.
(1)Upon a declaration that the principal amount of all outstanding Advances, an
amount equal to the Face Amount of each issued Letter of Credit and all interest and Fees
accrued thereon and all other amounts payable under this Agreement are immediately due and
payable pursuant to Section 9.01 (or such obligations otherwise becoming immediately due and
payable as provided in Section 9.01), all other Secured Obligations (except for those arising
pursuant to the Eligible Hedging Agreements and Other Secured Obligations) shall be
immediately due and payable and the Agent shall, at the request of the Majority Lenders,
commence such legal action or proceedings as may be deemed expedient, including the
commencement of enforcement proceedings under the Loan Documents or any other security
granted by the Loan Parties or any other Person in connection with the Credit Facility to the
Agent, all without any additional notice, presentation, demand, protest, notice of dishonour,
entering into of possession of any of the Assets, or any other action or notice, all of which the
Loan Parties hereby expressly waive to the extent permitted by applicable Law.
(2)The rights and remedies of the Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are in addition to and not in substitution for any
other rights or remedies. Nothing contained herein or in the Loan Documents or any other
security hereafter held by the Agent and the Lenders with respect to the indebtedness or liability
of the Loan Parties or any other Person to the Agent and the Lenders or any part thereof, nor
any act or omission of the Agent and the Lenders with respect to the Loan Documents, the
Collateral or such other security, shall in any way prejudice or affect the rights, remedies and
powers of the Agent and the Lenders hereunder or under the Loan Documents.
Section 9.03Application of Funds.
(1)After the exercise of remedies provided for in Section 9.02 (or after the
Accommodations and other amounts have automatically become immediately due and payable
pursuant to Section 9.01), including in any bankruptcy or insolvency proceeding, any amounts
received on account of the Secured Obligations shall be applied by the Agent in the following
order (subject, in the case of amounts owing to a Defaulting Lender, to Section 2.15(1)(ii)):
(i)First, to payment of that portion of the Secured Obligations constituting
indemnities and expenses (other than principal and interest and Fees, but
including fees of counsel and other advisors engaged by the Agent)
payable to the Agent in its capacity as such;
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(ii)Second, to payment of that portion of the Secured Obligations
constituting Fees (other than principal and interest) payable to the
Lenders, rateably among them in proportion to the amounts described in
this clause Second payable to them;
(iii)Third, to payment of that portion of the Secured Obligations constituting
accrued and unpaid interest (including, but not limited to, default interest
and interest payable before and after the commencement of any
insolvency or bankruptcy proceeding) on the Accommodations, rateably
among the Lenders in proportion to the respective amounts described in
this clause Third payable to them;
Fourth, to payment of that portion of the Secured Obligations constituting unpaid principal of the
Accommodations (including an amount necessary to Cash Collateralize the undrawn Face Amount of any
Letter of Credit),
the Hedge Termination Value under Eligible Hedging Agreements and all
Other Secured Obligations, rateably among the Secured Parties in
proportion to the respective amounts described in this clause Fourth held
by them;
(iv)Fifth, to the payment of all other Secured Obligations of the Loan Parties
that are due and payable to the Agent and the other Secured Parties on
such date, rateably among the Secured Parties in proportion to the
respective amounts described in this clause held by them; and
(v)Last, the balance, if any, after all of the Secured Obligations have been
indefeasibly paid in full (other than contingent indemnification obligations
not then due), to the Borrowers or as otherwise required by Law;
provided, however, that proceeds of any Collateral shall only be applied to the Secured
Obligations secured by such Collateral as specified in the applicable Loan Document.
(2)Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of
Credit pursuant to clause (iv) above shall be applied to satisfy drawings under such Letters of
Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be applied to the
other Secured Obligations, if any, in the order set forth above and, if no Secured Obligations
remain outstanding, to the Borrowers or as otherwise required by Law.
ARTICLE 10
YIELD PROTECTION
Section 10.01  Increased Costs.
(1)Increased Costs Generally. If any Change in Law shall:
(i)impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated
in by, any Lender;
(ii)subject any Lender to any Tax of any kind whatsoever with respect to this
Agreement or any Accommodations made by it, or change the basis of
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taxation of payments to such Lender in respect thereof, except for
Indemnified Taxes or Other Taxes covered by Section 10.02 and the
imposition, or any change in the rate, of any Excluded Tax payable by
such Lender; or
(iii)impose on any Lender or any applicable interbank market any other
condition, cost or expense (other than Taxes) affecting this Agreement or
Accommodations made by such Lender,
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining
any Accommodation (or of maintaining its obligation to make any such Accommodation), or to increase the
cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other
amount), then upon request of such Lender the applicable Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(2)Capital/Liquidity Requirements. If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender’s holding
company, if any, regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s capital or liquidity or on the capital or liquidity of
such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments
of such Lender or the Accommodations made by such Lender, to a level below that which such
Lender or its holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of its holding company with respect to
capital adequacy), then from time to time the applicable Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or its holding company for any
such reduction suffered.
(3)Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (1) or (2) of this Section (“Additional Compensation”),
including a description of the event by reason of which it believes it is entitled to such
compensation, and supplying reasonable supporting evidence (including, in the event of a
Change in Law, a photocopy of the applicable Law evidencing such change) and reasonable
detail of the basis of calculation of the amount or amounts, and delivered to the applicable
Borrower shall be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within ten (10) days after receipt thereof. In the
event the Lender subsequently recovers all or part of the Additional Compensation paid by the
Borrowers, it shall promptly repay an equal amount to the applicable Borrower. The obligation
to pay such Additional Compensation for subsequent periods will continue until the earlier of
termination of the Accommodation or the Commitment affected by the Change in Law, change
in capital requirement or the lapse or cessation of the Change in Law giving rise to the initial
Additional Compensation. A Lender shall make reasonable efforts to limit the incidence of any
such Additional Compensation and seek recovery for the account of the applicable Borrower
upon the applicable Borrower’s request at the applicable Borrower’s expense, provided such
Lender in its reasonable determination suffers no appreciable economic, legal, regulatory or
other disadvantage. Notwithstanding the foregoing provisions, a Lender shall only be entitled to
rely upon the provisions of this Section 10.01 if and for so long as it is not treating the
applicable Borrower in any materially different or in any less favourable manner than is
applicable to any other customers of such Lender, where such other customers are bound by
similar provisions to the foregoing provisions of this Section 10.01.
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Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such compensation, except that the
applicable Borrower shall not be required to compensate a Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies the
applicable Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefore, unless the Change in Law giving rise to such increased
costs or reductions is retroactive, in which case the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof.
Section 10.02  Taxes.
(1)Payments Subject to Taxes. Any and all payments by or on account of any
obligation of any Loan Party hereunder or under any other Loan Document shall be made free
and clear of and without deduction or withholding for any Taxes except as required by
applicable Law; provided that if any Loan Party, the Agent or any Lender is required by
applicable Law (as determined in the good faith discretion of the applicable withholding agent)
to deduct or withhold any Taxes in respect of any payment by or on account of any obligation of
a Loan Party hereunder or under any other Loan Document, then (i) if such Tax is an
Indemnified Tax (including any Other Taxes), the sum payable shall be increased by such Loan
Party when payable as necessary so that after making or allowing for all required deductions
and payments for Indemnified Taxes (which excludes, for the avoidance of doubt, Excluded
Taxes) (including deductions and withholdings of Indemnified Taxes applicable to additional
sums payable under this Section) the Agent or Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or payments for
Indemnified Taxes (which excludes, for the avoidance of doubt, Excluded Taxes) been required,
(ii) such Loan Party shall make any such deductions required to be made by it under applicable
Law (as determined in the good faith discretion of the applicable withholding agent), and (iii)
such Loan Party shall timely pay the full amount required to be deducted to the relevant
Governmental Entity in accordance with applicable Law.
(2)Payment of Other Taxes by the Borrowers. Without limiting the provisions of
paragraph (1) above, each Loan Party shall timely pay any Other Taxes to the relevant
Governmental Entity in accordance with applicable Law.
(3)Indemnification by the Borrowers. The Borrowers shall indemnify the Agent and
each Lender, within fifteen (15) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes in respect of any payments by or on account of any obligation
of a Loan Party hereunder or under any Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the
Agent or such Lender in respect of any payment by or on account of any obligation of a Loan
Party hereunder or under any other Loan Document and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Entity.
A certificate as to the amount of such payment or liability delivered to a Loan Party by a Lender
(with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(4)Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by a Loan Party to a Governmental Entity, such Loan Party shall deliver
to the Agent the original or a certified copy of a receipt issued by such Governmental Entity
evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Agent.
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Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding tax with
respect to payments hereunder or under any other Loan Document shall, at the request of the Borrower,
deliver to the Borrowers (with a copy to the Agent), at the time or times prescribed by applicable Law or
reasonably requested by the Borrowers or the Agent, such properly completed and executed documentation
prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced
rate of withholding. In addition, any Lender, if requested by the Borrowers or the Agent, shall deliver
such other
documentation prescribed by applicable Law or reasonably requested by the Borrowers or the
Agent as will enable the Borrowers or the Agent to determine whether or not such Lender is
subject to withholding or information reporting requirements provided, however, that
notwithstanding any of the foregoing in this Section 10.02(5), no Lender shall be required to
provide any documentation or information of any kind if in the applicable Lender’s reasonable
judgment such completion, execution or submission of documentation or information would
subject such Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender. Without limiting the generality of the
foregoing, any Lender shall deliver to the Borrowers (with a copy to the Agent), at the time or
times prescribed by applicable Law or reasonably requested by the Borrowers or the Agent: (i)
in the case of a Lender that is a “U.S. person” as defined under Section 7701(a)(30) of the
Code, an IRS Form W-9 certifying that such Lender is not subject to U.S. federal backup
withholding tax, and (ii) in the case of a Lender that is not a “U.S. person” as defined under
Section 7701(a)(30) of the Code, an IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form
W-8ECI, IRS Form W-8IMY (including all applicable attachments) and, in the case of a Lender
claiming the “portfolio interest exemption” from U.S. federal withholding tax, a certificate to the
effect that such Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
a “10 percent shareholder” of any Borrower within the meaning of Section 871(h)(3)(B) of the
Code, or a “controlled foreign corporation” related to any Borrower as described in Section
881(c)(3)(C) of the Code along with its executed copies of IRS Form W-8BEN or IRS Form W
8BEN-E.
(5)Treatment of Certain Refunds and Tax Reductions. If the Agent or a Lender
determines, in its sole discretion, that it has received a refund of any Indemnified Taxes or
Other Taxes as to which it has been indemnified by the Borrowers or with respect to which a
Loan Party has paid additional amounts pursuant to this Section 10.02, it shall pay to the
applicable Borrower or Guarantor, as applicable, an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by such Loan Party under
this Section with respect to the Indemnified Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Agent or such Lender, as the case may be, and without
interest (other than any net after-Tax interest paid by the relevant Governmental Entity with
respect to such refund). A Loan Party, upon the request of the Agent or such Lender, agrees to
repay the amount paid over to such Loan Party (plus any penalties, interest or other charges
imposed by the relevant Governmental Entity) to the Agent or such Lender if the Agent or such
Lender is required to repay such refund to such Governmental Entity. Notwithstanding anything
to the contrary in this paragraph, in no event will the Agent or a Lender be required to pay over
any amount to a Loan Party pursuant to this Section 10.02(6), the payment of which would
place the Agent or such Lender, as the case may be, in a less favourable net after-Tax position
than the Agent or such Lender, as the case may be, would have been if the indemnification
payments or additional amounts giving rise to such refund had never been paid, deducted or
withheld. This paragraph shall not be construed to require the Agent or any Lender to make
available its tax returns (or any other information relating to its taxes that it deems confidential)
to the Loan Parties or any other Person, to arrange its affairs in any particular manner or to
claim any available refund.
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If a payment made to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such
Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers and the
Agent at the time or times prescribed by law and at such time or times reasonably requested by the
Borrowers or the Agent such documentation prescribed by applicable Law and such additional
documentation
reasonably requested by the Borrowers or the Agent as may be necessary for the Borrowers
and the Agent to comply with their obligations under FATCA and to determine that such Lender
has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to
deduct and withhold from such payment under FATCA. For the avoidance of doubt, FATCA
shall include any amendments to FATCA made after the Closing Date.
(6)Each Lender shall indemnify the Agent within ten (10) days after demand therefor,
for the full amount of any Excluded Taxes attributable to and properly payable by such Lender
that are payable or paid by the Agent, and reasonable expenses arising therefrom or with
respect thereto, whether or not such Excluded Taxes were correctly or legally imposed or
asserted by the relevant Governmental Entity. A certificate as to the amount of such payment or
liability delivered to any Lender by the Agent shall be conclusive absent manifest error. Each
Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document against any amount due to the Agent under this
paragraph (8). The agreements in this paragraph (8) shall survive the resignation and/or
replacement of the Agent.
Section 10.03  Mitigation Obligations: Replacement of Lenders.
(1)Designation of a Different Lending Office. If any Lender requests compensation
under Section 10.01, or requires the Borrowers to pay any Indemnified Taxes, including Other
Taxes, or any additional amount to any Lender or any Governmental Entity for the account of
any Lender pursuant to Section 10.02, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Accommodations hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in
the judgment of such Lender (with the prior consent of the Borrowers), such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 10.01 or Section
10.02, as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.
The Borrowers hereby agree to pay all reasonable out-of-pocket costs and expenses incurred
by any Lender in connection with any such designation or assignment.
(2)Replacement of Lenders. If any Lender requests compensation under Section
10.01, if a Borrower is required to pay any Indemnified Taxes, including Other Taxes, or any
additional amount to any Lender or any Governmental Entity for the account of any Lender
pursuant to Section 10.02 or if any Lender’s obligations are suspended pursuant to Section
10.04, then the Borrowers may either, at their sole expense and effort, upon ten (10) days’
notice to such Lender and the Agent: (i) repay all outstanding amounts due to such affected
Lender (or such portion which has not been acquired pursuant to clause (ii) below) and
thereupon such Commitment of the affected Lender shall be permanently cancelled and the
aggregate Commitment shall be permanently reduced by the same amount and the
Commitment of each of the other Lenders shall remain the same; or (ii) require such Lender to
assign, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Article 17), all of its interests, rights and obligations under this Agreement
and the related Loan Documents (other than Eligible Hedging Agreements and Other Secured
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Agreements) to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:
the Borrowers pay the Agent the assignment fee specified in Section 17.01;
(i)the assigning Lender receives payment of an amount equal to the
outstanding principal of its Accommodations Outstanding and
participations in disbursements under Letters of Credit, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents (including any breakage costs and
amounts required to be paid under this Agreement as a result of
prepayment to a Lender) (other than Eligible Hedging Agreements and
Other Secured Agreements) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts);
(ii)in the case of any such assignment resulting from a claim for
compensation under Section 10.01 or payments required to be made
pursuant to Section 10.02, such assignment will result in a reduction in
such compensation or payments thereafter; and
(iii)such assignment does not conflict with applicable Law.
A Lender shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrowers to require such assignment and delegation cease to apply.
Section 10.04  Illegality.
If any Lender determines that any applicable Law has made it unlawful, or that any
Governmental Entity has asserted that it is unlawful, for any Lender or its applicable lending
office to make or maintain any Accommodations, or to determine or charge interest rates based
upon any particular rate, then, on notice thereof by such Lender to the Parent through the
Agent, any obligation of such Lender with respect to the activity that is unlawful shall be
suspended until such Lender notifies the Agent and the Parent that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the Borrowers shall,
upon demand from such Lender (with a copy to the Agent), prepay or, if conversion would avoid
the activity that is unlawful, convert any Accommodations, or take any necessary steps with
respect to any Letters of Credit in order to avoid the activity that is unlawful. Upon any such
prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so
prepaid or converted. Each Lender agrees to designate a different lending office if such
designation will avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
Notwithstanding anything to the contrary in this Agreement, if any Borrower ceases to maintain, directly or
with its Subsidiaries, business operations in Canada, then BDC may, by written notice thereof to the
Borrowers and to the Agent, declare its obligations to make or maintainAccommodationsunder
thisAgreementtobeterminated.Insuch event, each Borrower shall prepay the
principal of all BDC’s Accommodations Outstanding together with all accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan Documents (including any
breakage costs and amounts required to be paid under this Agreement as a result of prepayment to a
Lender). The Borrowers may elect, instead of prepaying any obligations to BDC, to replace BDC in
accordance with the provisions of Section 10.03(2) of the Agreement mutatis mutandis.
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ARTICLE 11
RIGHT OF SETOFF
Section 11.01  Right of Setoff.
If an Event of Default has occurred and is continuing, each of the Lenders and each of
their respective Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by law and without prior notice to the Borrowers, any such notice being
expressly waived by the Borrowers, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or
for the credit or the account of the Borrowers or any Guarantor against any and all of the
obligations of the Borrowers or any Guarantor now or hereafter existing under this Agreement
or any other Loan Document to such Lender, irrespective of whether or not such Lender has
made any demand under this Agreement or any other Loan Document and although such
obligations of the Borrowers or applicable Guarantor may be contingent or unmatured or are
owed to a branch or office of such Lender different from the branch or office holding such
deposit or obligated on such indebtedness; provided that if any Defaulting Lender exercises any
such right of set-off, (x) all amounts so set off shall be paid over immediately to the Agent for
further application in accordance with the provisions of Section 2.15(1)(ii) and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and deemed held
in trust for the benefit of the Agent, each Fronting Letter of Credit Lender and the Lenders, and
(y) the Defaulting Lender shall provide promptly to the Agent a statement describing in
reasonable detail the obligations owing to such Defaulting Lender as to which it exercised such
right of set-off. The rights of each of the Lenders and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of setoff,
consolidation of accounts and bankers’ lien) that the Lenders or their respective Affiliates may
have. Each Lender agrees to promptly notify the Parent and the Agent after any such setoff and
application, but the failure to give such notice shall not affect the validity of such setoff and
application. If any Affiliate of a Lender exercises any rights under this Section 11.01, it shall
share the benefit received in accordance with Section 12.01 as if the benefit had been received
by the Lender of which it is an Affiliate.
ARTICLE 12
SHARING OF PAYMENTS BY LENDERS
Section 12.01  Sharing of Payments by Lenders.
If any Lender, by exercising any right of setoff as permitted by Article 11, obtains any payment or other
reduction that might result in such Lender receiving payment or other reduction of a proportion of the
aggregate amount of its Accommodations and accrued interest thereon or other obligations hereunder
greater than its pro rata share thereof as provided herein, then the Lender receiving such payment or other
reduction shall: (a) notify the Agent of such fact, and (b) purchase (for cash at face value) participations in the
Accommodations Outstanding and such other obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders
rateably in accordance with the aggregate amount of principal of and accrued interest on their respective
Accommodations Outstanding and other amounts owing them, provided that:
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(1)if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest,
(2)the provisions of this Section shall not be construed to apply to (x) any payment
made by the Borrowers or applicable Guarantor pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Accommodations or participations in
disbursements under Letters of Credit to any assignee or participant, other than to the
Borrowers or any Guarantor or any Affiliate of the Borrowers or any Guarantor (as to which the
provisions of this Section shall apply); and
(3)the provisions of this Section shall not be construed to apply to (w) any payment
made while no Event of Default has occurred and is continuing in respect of obligations of any
Tucows Group Entity to such Lender that do not arise under or in connection with the Loan
Documents, (x) any payment made in respect of an obligation that is secured by a Permitted
Lien or that is otherwise entitled to priority over the obligations under or in connection with the
Loan Documents, (y) any reduction arising from an amount owing to the Borrowers or any
Guarantor upon the termination of derivatives entered into between the Borrowers or any
Guarantor and such Lender, or (z) any payment to which such Lender is entitled as a result of
any form of credit protection obtained by such Lender.
The Loan Parties consent to the foregoing and agree, to the extent they may effectively
do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against each Loan Party rights of setoff with respect to such
participation in accordance with Article 11 as fully as if such Lender were a direct creditor of
each Loan Party in the amount of such participation.
ARTICLE 13
AGENT’S CLAWBACK
Section 13.01  Agent’s Clawback.
Funding by Lenders; Presumption by Agent. Unless the Agent shall have received notice from a Lender
prior to the proposed date of any advance of funds that such Lender will not make available to the Agent such
Lender’s share of such advance, the Agent may assume that such Lender has made such share available on
such date in accordance with the provisions of this Agreement concerning funding by Lenders and may (but
shall not be obligated to), in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share of the applicable advance
available to the Agent, then the applicable Lender shall pay to the Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the date such amount is made
available to the applicable Borrower to but excluding the date of payment to the Agent, at a rate determined
by the Agent in accordance with prevailing banking industry practice on interbank compensation. If such
Lender pays such amount to the Agent, then such amount shall constitute such Lender’s Accommodation
included in such advance. If the Lender does not do so forthwith, the applicable Borrower shall pay to the
Agent forthwith on written demand such corresponding amount with interest thereon at the interest rate
applicable to the advance in question. Any such payment by the applicable
Borrower shall be without prejudice to any claim the applicable Borrower may have against a
Lender that has failed to make such payment to the Agent.
(4)Payments by Borrowers; Presumptions by Agent. Unless the Agent shall have
received notice from the applicable Borrower prior to the date on which any payment is due to
the Agent for the account of any Lender hereunder that the applicable Borrower will not make
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such payment, the Agent may assume that the applicable Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption, distribute the
amount due to the Lenders. In such event, if the applicable Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the Agent forthwith on demand
the amount so distributed to such Lender with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment to the Agent, at a
rate determined by the Agent in accordance with prevailing banking industry practice on
interbank compensation.
ARTICLE 14
AGENCY
Section 14.01  Appointment and Authority.
Each of the Lenders hereby irrevocably appoints Bank of Montreal (together with its
successors and permitted assigns in accordance with the terms of this Agreement) hereunder
to act on its behalf as the Agent hereunder and under the other Loan Documents (other than
Eligible Hedging Agreements and Other Secured Agreements) and authorizes the Agent to take
such actions on its behalf and to exercise such powers as are delegated to the Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably incidental
thereto. Without limiting the foregoing, each of the Lenders authorizes the Agent to (x) enter
into, on its own behalf and on behalf of each Lender, a subordination agreement in respect of
Subordinated Debt; and (y) release any Guarantor from its respective guarantee and Security in
accordance with the terms hereof or thereof or in order to give effect to the provisions of this
Agreement, including a Disposition permitted hereunder (in each case, in whole or in part as
may be necessary in the circumstance). The provisions of this Article (other than Section 14.07)
are solely for the benefit of the Agent and the Lenders, and neither the Borrowers nor any
Guarantor shall have rights as a third party beneficiary of any of such provisions, except in
respect of this Section 14.01. In addition to the foregoing, the Agent shall provide and/or deliver
such “know your client”, anti-money laundering or similar information in respect of the Loan
Parties as may be reasonably requested by a Lender and that is in the possession of the Agent.
Section 14.02  Rights as a Lender.
The Person serving as the Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not the
Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as the Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act
as the financial advisor or in any other advisory capacity for and generally engage in any kind of
business with any Tucows Group Entity or Ting Fiber Group Entity or any Affiliate thereof as if
such Person were not the Agent and without any duty to account to the Lenders.
Section 14.03  Exculpatory Provisions.
(1)The Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. Without limiting the generality of the foregoing, the
Agent:
(i)shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;
(ii)shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
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contemplated hereby or by the other Loan Documents that the Agent is
required to exercise as directed in writing by the Majority Lenders (or
such other number or percentage of the Lenders as shall be expressly
provided for in the Loan Documents), but the Agent shall not be required
to take any action that, in its opinion or the opinion of its counsel, may
expose the Agent to liability or that is contrary to any Loan Document or
applicable Law; and
(iii)shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Tucows Group Entity or
Ting Fiber Group Entity or any of their Affiliates that is communicated to
or obtained by the person serving as the Agent or any of its Affiliates in
any capacity.
(2)The Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Majority Lenders (or such other number or percentage of the
Lenders as is necessary, or as the Agent believes in good faith is necessary, under the
provisions of the Loan Documents) or (ii) in the absence of its own gross negligence or wilful
misconduct. The Agent shall be deemed not to have knowledge of any Default unless and until
notice describing the Default is given to the Agent by the Parent or a Lender.
(3)Except as otherwise expressly specified in this Agreement, the Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan Document, (ii)
the contents of any certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the satisfaction of
any condition specified in this Agreement, other than to confirm receipt of items expressly
required to be delivered to the Agent.
Section 14.04  Reliance by Agent.
The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet posting or other distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to the making of an
Accommodation that by its terms must be fulfilled to the satisfaction of a Lender, the Agent may
presume that such condition is satisfactory to such Lender unless the Agent shall have received
notice to the contrary from such Lender prior to the making of such Accommodation or the
issuance of such Letter of Credit. The Agent may consult with legal counsel (who may be
counsel for the Loan Parties), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts.
Section 14.05  Indemnification of Agent.
Each Lender agrees to indemnify the Agent and hold it harmless (to the extent not
reimbursed by the Loan Parties), rateably according to its Applicable Percentage (and not
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jointly or jointly and severally) from and against any and all losses, claims, damages, liabilities
and related expenses, including the fees, charges and disbursements of any counsel, which
may be incurred by or asserted against the Agent in any way relating to or arising out of the
Loan Documents or the transactions therein contemplated. However, no Lender shall be liable
for any portion of such losses, claims, damages, liabilities and related expenses resulting from
the Agent’s gross negligence or wilful misconduct.
Section 14.06  Delegation of Duties.
The Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by the Agent from among the Lenders (including the Person serving as Agent) and
their respective Affiliates. The Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related Parties. The
provisions of this Article and other provisions of this Agreement for the benefit of the Agent shall
apply to any such sub-agent and to the Related Parties of the Agent and any such sub-
agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Agent.
Section 14.07  Replacement of Agent.
(1)The Agent may at any time give notice of its resignation to the Lenders and the
Parent. Upon receipt of any such notice of resignation, the Majority Lenders shall have the
right, with the prior consent of the Parent, to appoint a successor, which shall be a Lender and
having an office in Toronto, Ontario or an Affiliate of any such Lender with an office in Toronto.
The Agent may also be removed at any time by the Majority Lenders upon 30 days’ notice to
the Agent and the Parent as long as the Majority Lenders, with the prior consent of the Parent,
appoint and obtain the acceptance of a successor within such 30 days, which shall be a Lender
having an office in Toronto, or an Affiliate of any such Lender with an office in Toronto.
If no such successor shall have been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may
on behalf of the Lenders, appoint a successor Agent meeting the qualifications specified in Section 14.07(1);
provided that if the Agent shall notify the Parent and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in accordance with such notice
and (a) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other
Loan Documents (except that in the case of any collateral security held by the Agent on behalf of the Lenders
under any of the Loan Documents, the retiring Agent shall continue to hold such
collateral security until such time as a successor Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the Agent shall
instead be made by or to each Lender directly, until such time as the Majority Lenders appoint a
successor Agent as provided for above in the preceding paragraph.
(2)Upon a successor’s appointment as Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the former
Agent, and the former Agent shall be discharged from all of its duties and obligations hereunder
or under the other Loan Documents (if not already discharged therefrom as provided in the
preceding paragraph) other than as a result of such former Agent’s gross negligence or willful
misconduct. The fees payable by the Borrowers to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the termination of the service of the former Agent, the provisions of this Article
14 and of Article 16 shall continue in effect for the benefit of such former Agent, its sub-agents
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and their respective Related Parties in respect of any actions taken or omitted to be taken by
any of them while the former Agent was acting as Agent.
Section 14.08  Non-Reliance on Agent and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon the
Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement, any other
Loan Document or any related agreement or any document furnished hereunder or thereunder.
Section 14.09  Collective Action of the Lenders.
Each of the Lenders hereby acknowledges that to the extent permitted by applicable Law, any collateral
security and the remedies provided under the Loan Documents to the Lenders are for the benefit of the
Lenders (including the Hedge Lenders and Service Lenders) collectively and acting together and not
severally and further acknowledges that its rights hereunder and under any collateral security are to be
exercised not severally, but by the Agent upon the decision of the Majority Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for in the Loan Documents). Accordingly,
notwithstanding any of the provisions contained herein or in any collateral security, each of the Lenders
hereby covenants and agrees that it shall not be entitled to take any action hereunder or thereunder
including, without limitation, any declaration of default hereunder or thereunder but that any such action shall
be taken only by the Agent with the prior written agreement of the Majority Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for in the Loan Documents). Each of the Lenders
hereby further covenants and agrees that upon any such written agreement being given, it shall co-operate
fully with the Agent to the extent requested by the Agent. Notwithstanding the foregoing, in the absence of
instructions from the Lenders and where in the sole opinion of the Agent, acting reasonably and in good faith,
the exigencies of the situation warrant such action, the Agent may without notice to or consent of the Lenders
take such action on behalf of the Lenders as it deems appropriate or desirable in the interest of the Lenders.
Section 14.10  Anti-Money Laundering Legislation.
(1)Each of the Loan Parties acknowledges that, pursuant to (i) the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada), The Financial Crimes Enforcement
Network (FinCEN) rule “Customer Due Diligence Requirements for Financial Institutions”, the
Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et. seq., (the Bank
Secrecy Act)) (United States), as amended by Title III of the Patriot Act, (ii) the Trading with the
Enemy Act (United States), as amended, and each of the foreign assets control regulations of
the United States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto (United States), (iii) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079)
(United States) and other applicable anti-money laundering, anti-terrorist financing, government
sanction and “know your client” or “know your customer” Laws, whether within Canada, the
United States or elsewhere (collectively, including any guidelines or orders thereunder, “AML
Legislation”), the Lenders and the Agent may be required to obtain, verify and record
information regarding each Loan Party, its directors, authorized signing officers, direct or
indirect shareholders or other Persons in control of the Loan Parties, and the transactions
contemplated hereby, including, without limitation, a Beneficial Ownership Certification in
relation to any of Parent or any Borrower that qualifies as a “legal entity customer” under the
Beneficial Ownership Regulation. The Loan Parties shall promptly provide all such information,
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including supporting documentation and other evidence, as may be reasonably requested by
any Lender or the Agent, or any prospective assign or participant of a Lender or the Agent, in
order to comply with any applicable AML Legislation, whether now or hereafter in existence.
(2)If the Agent has ascertained the identity of any Loan Party or any authorized
signatories of any such Loan Party for the purposes of applicable AML Legislation, then the
Agent:
(i)shall be deemed to have done so as an agent for each Lender, and this
Agreement shall constitute a “written agreement” in such regard between
each Lender and the Agent within the meaning of applicable AML
Legislation; and
(ii)shall provide to each Lender copies of all information obtained in such
regard without any representation or warranty as to its accuracy or
completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing,
each of the Lenders agrees that the Agent has no obligation to ascertain the identity of the
Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to
confirm the completeness or accuracy of any information it obtains from the Loan Parties or any
such authorized signatory in doing so.
Section 14.11  No Other Duties, etc.
Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or holders of similar
titles, if any, specified in this Agreement shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Agent or a
Lender hereunder.
Section 14.12 Erroneous Payments By The Agent
(1)If the Agent notifies a Lender or other Secured Party, or any Person who has
received funds on behalf of a Lender or other Secured Party (any such Lender, other Secured
Party or other recipient, a “Payment Recipient”) that the Agent has determined in its sole
reasonable discretion that any funds received by such Payment Recipient from the Agent or
any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly
received by, such Payment Recipient (whether or not known to such Payment Recipient) (any
such funds, whether received as a payment, prepayment or repayment of principal, interest,
fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and
demands the return of such Erroneous Payment (or a portion thereof), such Erroneous
Payment shall at all times remain the property of the Agent and shall be segregated by the
Payment Recipient and held in trust for the benefit of the Agent, and such Payment Recipient
shall promptly, but in no event later than one Business Day thereafter, return to the Agent, in
same day funds (in the currency so received), the amount of any such Erroneous Payment (or
portion thereof), together with interest thereon in respect of each day from and including the
date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to
the date such amount is repaid to the Agent (i) in respect of an Erroneous Payment in U.S.
Dollars, at the greater of the Federal Funds Rate and a rate determined by the Agent in
accordance with prevailing banking industry rules on interbank compensation from time to time
in effect, or (ii) in respect of an Erroneous Payment in Canadian Dollars, at a rate determined
by the Agent in accordance with prevailing banking industry rules on interbank compensation
from time to time in effect. To the extent permitted by applicable law, no Payment Recipient
shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to
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waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any
demand, claim or counterclaim by the Agent for the return of any Erroneous Payment received,
including without limitation waiver of any defense based on “discharge for value” or any similar
doctrine. A notice of the Agent to any Payment Recipient under this Section 14.12(1) shall be
conclusive, absent manifest error.
Without limiting immediately preceding Section 14.12(1), each Payment Recipient hereby further agrees that
if it receives an Erroneous Payment from the Agent (or any of its Affiliates) (x) that is in a different amount
than, or on a different date from, that specified in a notice of payment sent by the Agent (or any of its
Affiliates) with respect to such Erroneous Payment (the “Payment Notice”), or (y) that was not preceded or
accompanied by a Payment Notice sent by the Agent (or any of its Affiliates), then, said Payment Recipient
shall be on notice, in each case, that an error has been made with respect to such Erroneous Payment. Each
Payment Recipient agrees that, in each such case, or if it otherwise becomes aware an Erroneous Payment
(or portion thereof) may have been sent in error, such Payment Recipient shall promptly notify the Agent of
such occurrence and, upon demand from the Agent, it shall promptly, but in no event later than one Business
Day thereafter, return to the Agent the amount of any such Erroneous Payment (or portion thereof) in same
day funds (in the currency so received), together with interest thereon in respect of each day from and
including the date such Payment (or portion thereof) was received by such Payment Recipient to the date
such amount is repaid to the Agent (i) in respect of an Erroneous Payment in U.S. Dollars, at the greater of
the Federal Funds Rate and a rate determined by the Agent in accordance with prevailing banking industry
rules on interbank compensation from time to time in effect, or (ii) in respect of an Erroneous Payment in
Canadian Dollars, at a rate determined by the Agent in accordance with prevailing banking industry rules on
interbank compensation from time to time in effect.
(2)Each Payment Recipient hereby authorizes the Agent to set off, net and apply any
and all amounts at any time owing to such Payment Recipient under any Loan Document, or
otherwise payable or distributable by the Agent to such Payment Recipient from any source,
against any amount due to the Agent under any of the immediately preceding Section 14.12(1)
or Section 14.12(2) or under the indemnification provisions of this Agreement.
(3)In the event that an Erroneous Payment (or portion thereof) is not recovered by
the Agent for any reason, after demand therefor by the Agent (such unrecovered amount, an
“Erroneous Payment Return Deficiency”), the Borrowers and each other Loan Party hereby
agrees that (x) the Agent shall be subrogated to all the rights of such Payment Recipient with
respect to such amount (including, without limitation, the right to sell and assign the Advances
(or any portion thereof), which were subject to the Erroneous Payment Return Deficiency) and
(y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any
Secured Obligations owed by the Borrowers or any other Loan Party, except, in each case, to
the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous
Payment that is, comprised of funds received by the Agent from the Borrowers or any other
Loan Party for the purpose of making such Erroneous Payment For the avoidance of doubt, no
assignment of an Erroneous Payment Return Deficiency will reduce the Commitments of any
Payment Recipient and such Commitments shall remain available in accordance with the terms
of this Agreement. In addition, each party hereto agrees that, except to the extent that the
Agent has sold an Advance (or portion thereof) acquired pursuant to the assignment of an
Erroneous Payment Return Deficiency, and irrespective of whether the Agent may be equitably
subrogated, the Agent shall be contractually subrogated to all the rights and interests of the
applicable Payment Recipient under the Loan Documents with respect to each Erroneous
Payment Return Deficiency.
(4)Each party’s obligations, agreements and waivers under this Section 14.12 shall
survive the resignation or replacement of the Agent, any transfer of rights or obligations by, or
the replacement of, a Lender, the termination of the Commitments and/or the repayment,
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satisfaction or discharge of all Secured Obligations (or any portion thereof) under any Loan
Document.
Section 14.13  Receipt of Payments
If, at any time or times any Lender (including, for the avoidance of doubt, any Lender that takes Security
under the Bank Act (Canada) (“Bank Act Security”) at the request of the Agent) shall receive (i) by payment,
foreclosure, enforcement, setoff, or otherwise, any proceeds of collateral or any payments with respect to the
Secured Obligations, except for any such proceeds or payments received by such Lender from the Agent
pursuant to the terms of this Agreement, or (ii) payments from the Agent in excess of such Lender’s Pro Rata
Share of all such distributions by the Agent, such Lender promptly shall (A) turn the same over to the Agent,
in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for application to the Secured
Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Secured Obligations owed to the other Lenders so
that such excess payment received shall be applied rateably as among the Lenders in accordance with their
Pro Rata Shares; provided, that to the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery of the excess
payment.
Section 14.14  Bank Act Security
Without limitation of the foregoing, none of Bank of Montreal or any other Lender that
takes Bank Act Security at the request of the Agent (each, a “Bank Act Security Lender”) shall
take any action to enforce, foreclose on, release any Lien under, continue, extend or perfect the
Bank Act Security unless the Agent agrees that such Bank Act Security Lender shall take such
action, provided that the (i) partial or full release, and (ii) continuance, extension or perfection of
Bank Act security liens (held by such Bank Act Security Lender on any collateral) shall be a
required action by such Bank Act Security Lender if the Agent so requests or if the Agent is
otherwise taking such steps with respect to the Agent’s Liens in accordance with this
Agreement. In the event that a Bank Act Security Lender takes any such action such Bank Act
Security Lender to take such action, or otherwise in accordance with the foregoing, such Bank
Act Security Lender’s costs and expenses in its capacity as holder of the Bank Act Security
shall form part of and constitute such Lender’s enforcement costs and expenses for the
purposes of this Agreement, and such Bank Act Security Lender shall be entitled to the same
immunities, indemnities and exclusion from liability as are prescribed in favor of the Agent in
this Agreement, which shall apply mutatis mutandis. In addition to the foregoing, the provisions
set forth in Article 14 with respect to the Agent shall also apply in each case to any Bank Act
Security Lender as holder of the Bank Act Security. Notwithstanding anything to the contrary set
forth in the Agreement, this Section may not be amended without the consent of any Bank Act
Security Lender for so long such Bank Act Security Lender holds the Bank Act Security.
Section 14.15 Removal of a Non-Consenting Lender
(1)In the event that in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as contemplated by
Section 18.01 the consent of the Majority Lenders shall have been obtained but the consent of
one or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is
required shall not have been obtained; then, with respect to each Non-Consenting Lender (the
“Terminated Lender”) the Borrowers may, by giving written notice to the Agent and any
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Terminated Lender of its election to do so, elect to cause such Terminated Lender (and such
Terminated Lender hereby irrevocably agrees) to assign its outstanding Advances and its
Commitment, if any, in full to one or more Replacement Lenders in accordance with the
provisions of this Agreement and the Borrowers shall pay the fees, if any, payable thereunder in
connection with any assignment from the Non-Consenting Lender; provided:
(i)on the date of such assignment, the Replacement Lender shall pay to the
Terminated Lender an amount equal to the sum of (a) an amount equal
to the principal of, and all accrued interest on, all outstanding Advances
of the Terminated Lender, (b) an amount equal to all unreimbursed
drawings that have been funded by such Terminated Lender, together
with all then unpaid interest with respect thereto at such time, and (c) an
amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to this Agreement;
on the date of such assignment, the Borrowers shall pay any amounts payable to such Terminated Lender in
respect to any breakage costs or
otherwise owed as a consequence of such repayment or otherwise as if it
were a prepayment; and
(ii)each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender;
(iii)provided, the Borrowers may not make such election with respect to any
Terminated Lender that is also the Fronting Lender unless, prior to the
effectiveness of such election, the Borrowers shall cause each
outstanding Letter of Credit issued by the Fronting Lender to be
cancelled or cash collateralized or otherwise supported in a manner
satisfactory to the Fronting Lender. Upon the prepayment of all amounts
owing to any Terminated Lender and the termination of such Terminated
Lender’s Commitment, if any, such Terminated Lender shall no longer
constitute a “Lender” for purposes hereof; provided, any rights of such
Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.
(2)The right of the Borrowers to replace any Lender pursuant to Section 14.15 is
suspended during any period for which an Event of Default has occurred and is
continuing.
ARTICLE 15
NOTICES: EFFECTIVENESS; ELECTRONIC COMMUNICATION
Section 15.01  Notices, etc.
(1)Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as-provided in paragraph (2) below),
all notices and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or email or
sent by fax to the addresses or fax numbers set out opposite the applicable name on the
signature pages hereto or, in respect of the Lenders, on SCHEDULE 8 to this Agreement or, if
to a Lender, to it at its address or fax number specified in the Register or, if to a Loan Party
other than the Parent, in care of any of the Parent. Any notice that is provided to the Parent by
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the Agent or a Lender shall be deemed to have been provided to all Loan Parties for purposes
of this Agreement and the other Loan Documents. Any notice or other reporting obligation
(other than an Accommodation Notice) that is required to be provided by, or otherwise may be
provide by, one or more of the Loan Parties under this Agreement or any other Loan
Documents may be provided by the Parent (and when so provided shall be binding on all of the
Loan Parties).
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed
to have been given when received; notices sent by telecopier shall be deemed to have been given when sent
(except that, if not given on a Business Day between 9:00 a.m. and 5:00 p.m. local time where the recipient is
located, shall be deemed to have been given at 9:00 a.m. on the next Business Day for the recipient). Notices
delivered through electronic communications to the extent provided in paragraph (2) below, shall be effective
as provided in said paragraph (2).
(2)Electronic Communications. Notices and other communications to the Loan
Parties and the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites and any E-System) pursuant to procedures
approved by the Agent and the Loan Parties. The Agent or the applicable Loan Party may, in
their discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.
(3)Change of Address, Etc. Any party hereto may change its address, email
address or fax number for notices and other communications hereunder by notice to the other
parties hereto.
ARTICLE 16
EXPENSES; INDEMNITY: DAMAGE WAIVER
Section 16.01  Expenses; Indemnity: Damage Waiver.
(1)Costs and Expenses. The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agent, in connection with the syndication of the credit facilities
provided for herein, the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), and (ii) all reasonable out-of-pocket expenses incurred by the Agent or
any Lender including the reasonable fees, charges and disbursements of counsel, in
connection with the enforcement or protection of its rights in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or in connection with the
Accommodations issued hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Accommodations.
Indemnification by the Parent and the Borrower. The Parent and the Borrowers shall indemnify the Agent
(and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by any Loan Party arising out of, in connection with, or as a result of (i)
the execution or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance or non-performance by the parties hereto of
theirrespectiveobligationshereunderorthereunderortheconsummationor
non-consummation of the transactions contemplated hereby or thereby, (ii) any Accommodation or the use
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or proposed use of the proceeds therefrom (including any refusal by the Fronting Letter of Credit Lender
to honour a demand for payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or Release of Hazardous Materials on or from any property owned, leased, used or operated by
any Tucows Group Entity, or any Environmental Liabilities related in any way to any Tucows Group Entity,
or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by a
Loan Party and regardless of whether any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction
by final and non-appealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee or from disputes amongst Indemnitees or (y) result from a claim
brought by any Loan Party against an Indemnitee for breach of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Loan Party has obtained a final and
non-appealable judgment in its favour on such claim as determined by a court of competent
jurisdiction, nor shall it be available in respect of Taxes other than Taxes that represent losses or
damages arising from any non-Tax claim or matters specifically addressed in Section 10.02 and
Section 16.01(1).
(2)Reimbursement by Lenders. To the extent that any Loan Party for any reason
fails to indefeasibly pay any amount required under paragraph (1) or (2) of this Section to be
paid by it to the Agent (or any sub-agent thereof) or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Agent (or any such sub-agent) or such Related
Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing
acting for the Agent (or any such sub-agent) in connection with such capacity. The obligations of
the Lenders under this paragraph (3) are subject to the other provisions of this Agreement
concerning several liability of the Lenders.
(3)Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrowers and the Guarantors shall not assert, and hereby waive, any
claim against any Indemnitee, on any theory of liability, for indirect, consequential, punitive,
aggravated or exemplary damages (as opposed to direct damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby (or any breach thereof), the transactions contemplated hereby
or thereby, any Accommodation or the use of the proceeds thereof. No Indemnitee shall be
liable for any damages arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby, except to the extent such damages have resulted
from the gross negligence or wilful misconduct of such Indemnitee as determined by a court of
competent jurisdiction by final and non-appealable judgment.
(4)Payments. All amounts due under this Section shall be payable promptly after
demand therefor with documented particulars thereof. A certificate of the Agent or a Lender
setting forth the amount or amounts owing to the Agent, Lender or a sub-agent or Related
Party, as the case may be, as specified in this Section, including reasonable detail of the basis
of calculation of the amount or amounts, and delivered to the Parent shall be conclusive absent
manifest error.
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ARTICLE 17
SUCCESSORS AND ASSIGNS
Section 17.01  Successors and Assigns.
Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns permitted hereby except that neither the Parent, the Borrowers nor any Guarantor may
assign or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of the Agent and each Lender. No Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of paragraph (2) of this Section, (ii) by way of participation in accordance with the
provisions of paragraph (4) of this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of paragraph (6) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (4) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(5)Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Accommodations Outstanding at the time owing to it);
provided that:
(i)except if an Event of Default has occurred and is continuing or in the
case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Accommodations Outstanding at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment being assigned (which for this purpose
includes Accommodations Outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Accommodations Outstanding of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Agent or,
if “Trade Date” is specified in the Assignment and Assumption, as of the
Trade Date) shall not be less than $5,000,000, unless each of the Agent
and, so long as no Event of Default has occurred and is continuing, the
Parent otherwise consents to a lower amount;
(ii)each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Accommodations Outstanding
or the Commitment assigned, except that this clause (b) shall not prohibit
any Lender from assigning all or a portion of its rights and obligations
among separate credits on a non-pro rata basis;
any assignment of a Commitment must be approved by the Fronting Letter of Credit Lenders and the
Swingline Lender (such approval not to be unreasonably withheld, conditioned or delayed) unless the Person
that is the proposed assignee is itself already a Lender (other than a Defaulting Lender);
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(iii)except if any Event of Default has occurred and is continuing, any
assignment must be approved by the Agent (such approval not to be
unreasonably withheld, conditioned or delayed) unless:
(A)the proposed assignee is itself already a Lender; or
(B)the proposed assignee is a bank whose senior, unsecured,
non-credit enhanced, long term debt is rated at least A3, A- or A
low by at least two of Moody’s, S&P and DBRS, respectively;
(iv)any assignment must be approved by the Parent (such approval not to be
unreasonably withheld or delayed) unless (i) the proposed assignee is
itself an Affiliate of such assigning Lender or an Approved Fund; or (ii) if
an Event of Default under Section 9.01(1), Section 9.01(2), Section
9.01(4)(iii), Section 9.01(8) or Section 9.01(9) has occurred and is
continuing;
(v)the parties to each assignment shall execute and deliver to the Agent an
Assignment and Assumption, together with a processing and recordation
fee of Cdn.$3,500 payable by the Eligible Assignee (unless such
assignment is from a Lender to an Affiliate or Approved Fund thereof)
and such Eligible Assignee, if it shall not be a Lender, shall deliver to the
Agent an administrative questionnaire satisfactory to the Agent; and
(vi)in connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective
unless and until, in addition to the other conditions thereto set forth
herein, the parties to the assignment shall make such additional
payments to the Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment,
purchases by the assignee of participations or sub-participations, or other
compensating actions, including funding, with the consent of the Parent
and the Agent, the applicable pro-rata share of Accommodations
previously requested but not funded by the Defaulting Lender, to each of
which the applicable assignee and assignor hereby irrevocably consent),
to (1) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Agent, each Fronting Letter of Credit Lender and
each other Lender hereunder (and interest accrued thereon), and (2)
acquire (and fund as appropriate) its full pro rata share of all
Accommodations and participations in Letters of Credit in accordance
with the percentage equivalent of the ratio which such Defaulting
Lender’s portion of the Commitment bears to the aggregate amount of
the Commitment. Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Lender hereunder
shall become effective under applicable Law without compliance with the
provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until
such compliance occurs.
Subject to acceptance and recording thereof by the Agent pursuant to clause (iv) of this paragraph 2, from
and after the effective date specified in each Assignment and Assumption,
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the Eligible Assignee thereunder shall be a party to this Agreement with respect to the interest
assigned and, to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement and the other Loan Documents,
including any collateral security, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its obligations under
this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party
hereto) but shall continue to be entitled to the benefits of Article 10 and Article 16, and shall
continue to be liable for any breach of this Agreement by such Lender, with respect to facts and
circumstances occurring prior to the effective date of such assignment; provided that except to
the extent otherwise expressly agreed to by the affected parties, no assignment by a Defaulting
Lender will constitute a waiver or release of any claim of any party hereunder arising from that
Lender having been a Defaulting Lender. Any payment by an assignee to an assigning Lender
in connection with an assignment or transfer shall not be or be deemed to be a repayment by
the Borrowers or a new Accommodations to the Borrowers.
Notwithstanding any other provision of this Agreement, the Agent shall have no
responsibility for monitoring any assignments or participations to Ineligible Transferees. The list
of all Ineligible Transferees shall be made available to all Lenders.
(6)Register. The Agent shall maintain at one of its offices in Toronto, Ontario a copy
of each Assignment and Assumption delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal amounts (and
stated interest) of the Accommodations Outstanding owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive,
absent manifest error, and the Borrower, the Agent and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
Each Lender that sells a participation shall, acting solely for this purpose and as agent
of the Borrower, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each Participant’s interest in the
Accommodations Outstanding or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans, letters of credit or its
other obligations under any Loan Document) to any Person except to the extent that such
disclosure is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement notwithstanding any notice to
the contrary.
Participations. Any Lender may at any time, without the consent of, or notice to, the Parent or the Agent, sell
participations to any Person (other than a natural person, a Loan Party, any Affiliate of a Loan Party, a
Defaulting Lender or an Ineligible Transferee) (each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its Commitment and/or the
Accommodations Outstanding owing to
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it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Parent, the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. Any payment by a Participant to a Lender in connection
with a sale of a participation shall not be or be deemed to be a repayment by the Borrowers or a
new Accommodation to the Borrowers.
Subject to paragraph (5) of this Section, the Parent and each Borrower agrees that to
the extent permitted by Law, each Participant shall be entitled to the benefits of Article 11 as
though it were a Lender and had acquired its interest by assignment pursuant to paragraph (2)
of this Section, provided such Participant agrees to be subject to Article 12 as though it were a
Lender.
(7)Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 10.01 and Section 10.02 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Parent’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Article 10.
(8)Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender, but
no such pledge or assignment shall release such Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
ARTICLE 18
AMENDMENTS AND WAIVERS
Section 18.01 Amendments and Waivers
(1)Subject to subsections (2), (3), (5) and (6) no acceptance, amendment or waiver
of any provision of any of the Loan Documents, nor consent to any departure by the Loan
Parties or any other Person from such provisions, shall be effective unless in writing and
approved by the Majority Lenders. Any acceptance, amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which it was given. Any
consent or acknowledgement provided by the Parent shall be binding on all Loan Parties.
Subject to Section 2.15(1), only written acceptances, amendments, waivers or consents signed by (i) all of
the Lenders shall increase the Commitment (other than as contemplated by Section 2.03) (and any increase
of any Lender’s Commitment shall require the consent of such Lender); (ii) each Lender to whom such
reduction shall apply, shall reduce the principal or amount of, or interest on, directly, any Accommodations
Outstanding or any Fees (provided that, for greater certainty, the Majority Lenders may amend the definition
of Total Funded Debt to Adjusted EBITDA Ratio or any of its constituent parts notwithstanding any effect on
the Applicable Margin); (iii) each Lender to whom such postponement shall apply, shall postpone any date
fixed for any payment of principal of, or interest on, any Accommodations Outstanding or any Fees; (iv) all of
the Lenders shall change the percentage of the Commitments or the number or percentage of Lenders
required for the Lenders, or any of them, or the Agent to take any action; (v) all of the Lenders shall permit
any termination of any of the guarantees required hereunder or the Security or release any of the guarantees
or all
or substantially all of the Assets subject to the Security (except as contemplated by this
Agreement or the other Loan Documents); (vi) all of the Lenders shall change the definition of
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Majority Lenders; (vii) all of the Lenders shall amend Section 9.03; or (viii) all of the Lenders
shall amend this Section 18.01(2); or (ix) all Lenders shall amend the Maturity Date.
(2)Only written acceptances, amendments, waivers or consents signed by the Agent,
in addition to the Majority Lenders, shall affect the rights or duties of the Agent in such capacity
under the Loan Documents. Only written acceptances, amendments, waivers or consents
signed by a Fronting Letter of Credit Lender shall affect the rights or duties of such Fronting
Letter of Credit Lender in such capacity under the Loan Documents. Only written acceptances,
amendments, waivers or consents signed by the Swingline Lender shall affect the rights or
duties of the Swingline Lender in such capacity under the Loan Documents.
(3)Anything in this Agreement to the contrary notwithstanding, no waiver, amendment
or modification of any provision of this Agreement that has the effect (either immediately or at
some later time, or directly or indirectly) of enabling the Loan Parties to satisfy a condition
precedent to the making of any Accommodation that represents an increase in the
Accommodations Outstanding shall be effective against the Lenders only if the Majority
Lenders have concurred with such waiver, amendment or modification.
(4)Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, the Agent and the Borrowers may, without the consent of any Lender, enter into
amendments or modifications to this Agreement or any of the other Loan Documents or to enter
into additional Loan Documents as the Agent deems appropriate in order to implement any
Benchmark Replacement, Canadian Benchmark Replacement, any Conforming Change or an
any Canadian Benchmark Replacement Conforming Change or otherwise effectuate the terms
of Section 3.06 or Section 3.07 (as applicable) in accordance with the terms thereof.
Section 18.02  Judgment Currency.
(1)If, for the purposes of obtaining judgment in any court, it is necessary to convert a
sum due to a Lender in any currency (the “Original Currency”) into another currency (the
“Other Currency”), the parties agree, to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which, in accordance with normal banking
procedures, such Lender could purchase the Original Currency with the Other Currency on the
Business Day preceding the day on which final judgment is given or, if permitted by applicable
Law, on the day on which the judgment is paid or satisfied.
The obligations of the Loan Parties in respect of any sum due in the Original Currency from it to any Lender
under any of the Loan Documents shall, notwithstanding any judgment in any Other Currency, be discharged
only to the extent that on the Business Day following receipt by the Lender of any sum adjudged to be so due
in the Other Currency, the Lender may, in accordance with normal banking procedures, purchase the Original
Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum
originally due to the Lender in the Original Currency, the Loan Parties agree, as a separate obligation and
notwithstanding the judgment, to indemnify the Lender, against any loss, and, if the amount of the Original
Currency so purchased exceeds the sum originally due to the Lender in the Original Currency, the Lender
shall remit such excess to the Parent.
ARTICLE 19
GOVERNING LAW; JURISDICTION; ETC.
Section 19.01  Governing Law; Jurisdiction; Etc.
(1)Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario and the laws of Canada applicable in that
Province.
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(2)Submission to Jurisdiction. Each of the Loan Parties irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts
of the Province of Ontario, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard
and determined in such court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Nothing in this Agreement or in any
other Loan Document shall affect any right that the Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan Document against
a Loan Party or its properties in the courts of any jurisdiction.
(3)Waiver of Venue. The Loan Parties each irrevocably and unconditionally waive, to
the fullest extent permitted by applicable Law, any objection that it may now or hereafter have
to the laying of venue of any action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (2) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the
defence of an inconvenient forum to the maintenance of such action or proceeding in any such
court.
(4)USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended from time to time, the
“Patriot Act”), and the Agent (for itself and not on behalf of any Lender), hereby notifies each
Loan Party that, pursuant to the requirements of the Patriot Act, such Lender and the Agent are
required to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party (and other identifying
information in the event this information is insufficient to complete verification) that will allow
such Lender or the Agent, as applicable, to identify each Loan Party in accordance with the
Patriot Act.
ARTICLE 20
WAIVER OF JURY TRIAL
Section 20.01  Waiver of Jury Trial
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
ARTICLE 21
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
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Section 21.01  Counterparts; Integration; Effectiveness; Electronic Execution.
(1)Counterparts; Integration; Effectiveness. This Agreement and each other Loan
Document may be executed in one or more counterparts (and by different parties hereto or
thereto in different counterparts), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by fax or other electronic
transmission of an executed counterpart of a signature page to this Agreement and each other
Loan Document shall be effective as delivery of an original executed counterpart of this
Agreement and such other Loan Document. This Agreement shall become effective when it has
been executed by the Agent and when the Agent has received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
(2)Electronic Execution. The words “execution,” “execute”, “signed,” “signature,”
and words of like import in or related to any document to be signed in connection with this
Agreement or any other Loan Document shall be deemed to include electronic signatures, or
the keeping of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a paper based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable
law, including, without limitation, as in provided Parts 2 and 3 of the Personal Information
Protection and Electronic Documents Act (Canada), the Electronic Commerce Act, 2000
(Ontario), the Electronic Commerce Act (Nova Scotia), the Electronic Transaction Acts (British
Columbia), the Electronic Transactions Act (Alberta), or any other similar laws based on the
Uniform Electronic Commerce Act of the Uniform Law Conference of Canada. The Agent may,
in its discretion, require that any such documents and signatures executed electronically or
delivered by fax or other electronic transmission be confirmed by a manually-signed original
thereof; provided that the failure to request or deliver the same shall not limit the effectiveness
of any document or signature executed electronically or delivered by fax or other electronic
transmission.
ARTICLE 22
TREATMENT OF CERTAIN INFORMATION: CONFIDENTIALITY
Section 22.01 TreatmentofCertainInformation:Confidentiality;Non-Public
Information.
Each of the Agent and the Lenders shall maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to it, its Affiliates and its and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and representatives (to the extent necessary to administer or
enforce this Agreement and the other Loan Documents) (it being understood that the Persons to whom such
disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential, with the applicable Agent or Lender being responsible for such
Person’s compliance with this Section), (b) to the extent requested by any regulatory authority
having jurisdiction over it (including any self-regulatory authority), (c) to the extent required by
applicable Laws or similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap, derivative, credit-linked note or
similar transaction relating to the Parent and its obligations, (g) with the consent of the Parent
or (h) to the extent such Information (x) becomes publicly available other than as a result of a
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breach of this Section by such Person or actually known to such Person or (y) becomes
available to, or has been made available to, the Agent or any Lender on a non-confidential
basis from a source other than any Loan Party, and (z) for the avoidance of doubt, by Agent to
any Secured Party. If the Agent or any Lender is requested or required to disclose any
Information (other than to any bank or other regulatory examiner) pursuant to or as required by
applicable Laws or by a subpoena or similar legal process, the Agent or such Lender, as
applicable, shall use its reasonable commercial efforts to provide the Parent with notice of such
requests or obligation in sufficient time so that the Parent may seek an appropriate protective
order or waive the Agent’s, or such Lender’s, as applicable, compliance with the provisions of
this Section, and the Agent and such Lender, as applicable, shall, to the extent reasonable,
co-operate with the Parent in the Parent obtaining any such protective order.
(3)For purposes of this Section, “Information” means all information received from
any Loan Party relating to any Tucows Group Entity or Ting Fiber Group Entity any of their
respective businesses. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information. In addition, the
Agent may disclose to any agency or organization that assigns standard identification numbers
to loan facilities such basic information describing the facilities provided hereunder as is
necessary to assign unique identifiers (and, if requested, supply a copy of this Agreement), it
being understood that the Person to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to make available to the public only such
Information as such person normally makes available in the course of its business of assigning
identification numbers.
(4)In addition, and notwithstanding anything herein to the contrary, the Agent may
provide basic information concerning the Parent, the Borrowers and the Guarantors and the
credit facilities established herein to Loan Pricing Corporation and/or other recognized trade
publishers of information for general circulation in the loan market.
The Loan Parties acknowledge and agree that (A) the Loan Documents and all reports, notices,
communications and other information or materials provided or delivered by, or on behalf of, the Loan Parties
hereunder (collectively, the “Borrower Materials”) may be disseminated by, or on behalf of, Agent, and
made available, to the Lenders by posting such Borrower Materials on an E-System; and (B) certain of the
Lenders (each a “Public Lender”) may have personnel who do not wish to receive material non public
information (“MNPI”) with respect to the Tucows Group or any of their respective Affiliates, or the respective
securities of
any of the foregoing, and who may be engaged in investment and other market related
activities with respect to such Persons’ securities. The Loan Parties hereby agree that they
shall (and shall cause such parent company or Subsidiary, as the case may be, to) (A) identify
in writing, and (B) to the extent reasonably practicable, clearly and conspicuously mark any
Borrower Materials that is publicly available or that is not material for purposes of United States
federal and state securities laws as “PUBLIC”. The Loan Parties agree that by identifying such
Borrower Materials as “PUBLIC” or publicly filing such Information with the SEC, then Agent
and the Lenders shall be entitled to treat such Borrower Materials as not containing any MNPI
for purposes of United States federal and state securities laws. The Loan Parties further
represent, warrant, acknowledge and agree that the following Information shall be deemed to
be PUBLIC, whether or not so marked, and do not contain any MNPI: (I) the Loan Documents,
including the schedules and exhibits attached thereto, and (II) administrative materials of a
customary nature prepared by the Loan Parties or Agent (including any Accommodation Notice
and any similar request or notice posted on or through an E-System). Before distribution of
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Borrower Materials, the Loan Parties agree to execute and deliver to Agent a letter authorizing
distribution of the evaluation materials to prospective Lenders and their employees willing to
receive MNPI, and a separate letter authorizing distribution of evaluation materials that do not
contain MNPI and represent that no MNPI is contained therein. The Loan Parties acknowledge
and agree that the list of Ineligible Transferees does not constitute MNPI and may be posted to
all Lenders by Agent (including any updates or supplements thereto).
(5)Each of Agent and each Lender acknowledges and agrees that it may receive
MNPI hereunder concerning the Loan Parties and their Affiliates and agrees to use such
information in compliance with all relevant policies, procedures and applicable Laws (including
United States federal and state securities laws and regulations). Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law, including
United States Federal and state securities Laws, to make reference to Borrower Materials that
are not made available through the “Public Side Information” portion of the Platform and that
may contain material non public information with respect to the Parent or its securities for
purposes of United States Federal or state securities laws.
ARTICLE 23
ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS
Section 23.01 Acknowledgement and Consent to Bail In of EEA Financial
Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party hereto
acknowledges that any liability of any Affected Financial Institution arising under any Loan
Document, to the extent such liability is unsecured, may be subject to the write-down and
conversion powers of the applicable Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by: (a) the application of any Write-Down and
Conversion Powers by the applicable Resolution Authority to any such liabilities arising
hereunder which may be payable to it by any party hereto that is an Affected Financial
Institution, and (b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such
liability into shares or other instruments of ownership in such Affected Financial
Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or any other Loan
Document, or (iii) the variation of the terms of such liability in connection with the exercise of the
Write-Down And Conversion Powers of the applicable Resolution Authority.
[Remainder of this page left intentionally blank.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective authorized officers as of the date first above written.
AGENT:BANK OF MONTREAL, as Agent
By: /s/ Frederic Gosselin
Name: Frederic Gosselin
Title: Senior Director, Loan Syndications
By: /s/Paulina Kursa
Name: Paulina Kursa
Title: Managing Direction
Address:
Bank of Montreal Agent Bank Services
250 Yonge Street, 11th Floor
Toronto, Ontario M5B 2L7
Attention: Manager, Agent Bank Services
Email: [***]
Facsimile: [***]
LENDERS:
BANK OF MONTREAL, as Lender, Swingline
Lender, Lead Swap Arranger and Fronting
Letter of Credit Lender
By: /s/Paulina Kursa
Name: Paulina Kursa
Title: Managing Direction
By: /s/Gregory Mancina
Name: Gregory Mancina
Title: Director, Corporate Finance
BANK OF MONTREAL, CHICAGO BRANCH,
as Lender,
By: /s/ Charles Reggie Rice
Name: Charles Reggie Rice
Title: Vice President
By:
Name:
Title:
THE TORONTO-DOMINION BANK, as Lender
and Co-Syndication Agent
By: /s/ Justin Whiteside
Name: Justin Whiteside
Title: Director, National Accounts
By: /s/ Kyle Rackley
Name: Kyle Rackley
Title: Associate Vice President Credit
BANK OF NOVA SCOTIA, as Lender and
Co-Syndication Agent
By: /s/ Caitlin Furtado
Name: Caitlin Furtado
Title: Director, National Accounts
By: /s/ Sebastian Reveredo
Name: Sebastian Reveredo
Title: Director, National Accounts
CANADIAN IMPERIAL BANK OF
COMMERCE, as Lender,
By: /s/ Jonathan Gross
Name: Jonathan Gross
Title: Associate, Authorized Signatory
By: /s/ Patrick Martin
Name: Patrick Martin
Title: Vice President, Authorized Signatory
NATIONAL BANK OF CANADA, as Lender,
By: /s/ Justin Marchesseault
Name: Justin Marchesseault
Title: Director
By: /s/ David Bernstein
Name: David Bernstein
Title: Associate Director
BUSINESS DEVELOPMENT BANK OF
CANADA, as Lender,
By: /s/ David Wearing
Name: David Wearing
Title: Director, Syndicated Financing
By: /s/ Conor Jefferies
Name: Conor Jefferies
Title: Associate Director, Syndicated
Financing
HSBC BANK CANADA, as Lender,
By: /s/ Ashley Charlton
Name: Ashley Charlton
Title: Director, Corporate Banking
By: /s/ Jordan Stewart
Name: Jordan Stewart
Title: Senior Director & Term Lead,
Corporate Banking
BORROWERS:TUCOWS INC., as Parent and U.S. Borrower
By:
Name: Davinder Singh
Title: Treasurer and Chief Financial Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention: Davinder Singh
TUCOWS.COM CO., as Canadian Borrower
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention: Davinder Singh
TING INC., as U.S. Borrower
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention: Davinder Singh
TUCOWS(DELAWARE)INC.asU.S.
Borrower
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention:
TUCOWS (EMERALD), LLC, as U.S. Borrower
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention: Davinder Singh
WAVELO, INC., as U.S. Borrower
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention:
Acknowledged and agreed by the Guarantors of the date first written above.
TUCOWS DOMAINS SERVICES, INC., as
Guarantor
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON
M6K 3M1
Attention: Davinder Singh
eNOM, LLC, as Guarantor
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention:  Davinder Singh
ASCIO TECHNOLOGIES, CORP., as
Guarantor
By:
Name: Davinder Singh
Title:Treasurer and Chief Financial
Officer
Address: 96 Mowat Ave., Toronto, ON M6K
3M1
Attention:  Davinder Singh
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
UNIT PURCHASE AND EXIT AGREEMENT
Exhibit 10.2


This UNIT PURCHASE AND EXIT AGREEMENT (this “Agreement”) is made as of July 27, 2026, by and among Tucows Inc., a Pennsylvania corporation (“Buyer” or “Tucows”), Ting Fiber, LLC, a Delaware limited liability company (the “Company” or “Ting”), Tucows Fiber, Inc., a Delaware corporation and the common member of the Company (the “Common Member”, and solely a party hereto for Section 4.6, Section 4.7, Section 5.2 and Section 6.2), Ting Issuer LLC, a Delaware limited liability company (“Ting Issuer”) and Generate TF Holdings, LLC, a Delaware limited liability company (“Seller” or “Generate”). Buyer, the Company, the Common Member, Ting Issuer and Seller are referred to individually as a “Party” and collectively as the “Parties”.
Capitalized terms used but not otherwise defined in this Agreement have the meanings given to such terms in the LLCA, as defined below.
RECITALS
WHEREAS, the Company, Seller, the Common Member and Tucows are parties to that certain Amended and Restated Limited Liability Company Agreement of the Company, dated as of August 11, 2022, as amended, restated, supplemented or otherwise modified from time to time (the “LLCA”);
WHEREAS, the Company and Seller are parties to that certain Series A Preferred Unit Purchase Agreement, dated as of August 8, 2022, as amended, restated, supplemented or otherwise modified from time to time (the “UPA”), pursuant to which Seller purchased Series A Preferred Units of the Company;
WHEREAS, Seller is the record and beneficial owner of all of the issued and outstanding Series A Preferred Units of the Company, including all Series A Preferred Units listed on Exhibit A, and Seller desires to transfer to Buyer all Equity Securities of the Company owned of record or beneficially by Seller or any of its Affiliates, including all Series A Preferred Units and all rights, powers, privileges, preferences, claims and interests appurtenant thereto (collectively, the “Purchased Interests”);
WHEREAS, the Parties have entered into that certain Non-Binding Letter of Intent - Generate Exit, dated June 25, 2026 (the “LOI”);
WHEREAS, the Company and Ubiquity California, LLC have entered into a separate Option Purchase Agreement, dated as of June 24, 2026 (the “Separate Option Agreement”), and the Parties intend that such agreement stand alone and not be governed by this Agreement;
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller’s right, title and interest in and to the Purchased Interests, and the Parties desire that, effective upon the Closing, Seller shall cease to be a Member, Preferred Member or other equityholder of the Company and shall have no continuing equity or other rights with respect to the Company, except as expressly provided in this Agreement, any other Transaction Document or the Separate Option Agreement;
WHEREAS, the Parties desire that the Transaction Documents include this Agreement, mutual releases and such other ancillary instruments as are reasonably necessary to give full effect to the
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
transactions contemplated by the LOI and this Agreement, but not to govern the matters addressed in the Separate Option Agreement; and
WHEREAS, Ting Issuer is the issuer of certain secured fiber revenue notes, including Class C Notes, and is joining this Agreement to the extent necessary to give effect to the C-Tranche protection contemplated herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
1.DEFINITIONS
1.1.Certain Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:
1.1.1.“ABS Financing” means the secured fiber revenue note financing of Ting Issuer and related securitization or financing arrangements outstanding as of the Closing.
1.1.2.“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized to be closed in New York, New York.
1.1.3.“Cash Consideration” means $3,000,000 in cash.
1.1.4.“Class C Notes” means any secured fiber revenue notes, secured network revenue term notes or other notes issued by Ting Issuer under the ABS Financing that are designated as “Class C” notes or as a “Class C” tranche, including the currently outstanding $16,000,000 initial principal amount of 9.15% Secured Fiber Revenue Notes, Series 2024-1, Class C.
1.1.5.“Closing” means the closing of the Equity Purchase and the other transactions contemplated to occur at the closing under this Agreement.
1.1.6.“Closing Date” means the date on which the Closing occurs.
1.1.7.“Closing DC Purchase” means Buyer’s or its Affiliate’s purchase from Ting of Ting’s owned data center property located at 7700 South Wheeling Court, Centennial, Colorado 80112, on an as-is, where- is basis, for a purchase price equal to $6,000,000.
1.1.8.“Closing Injection” means Buyer’s or its Affiliate’s new-money investment into Ting in the amount of $5,000,000 concurrently with the Closing.
1.1.9.“Equity Purchase” means Buyer’s purchase from Seller of all of Seller’s right, title and interest in and to the Purchased Interests pursuant to this Agreement.
1.1.10.“Existing Transaction Agreements” means the LLCA, the UPA, the AssetCo LLCA and each other agreement, document or instrument related to Seller’s equity investment in Ting, Seller’s status as Preferred Member, the Purchased Interests or the Network JV, in each case other than this Agreement, the Transaction Documents and the Separate Option Agreement. As used herein, “AssetCo LLCA” means the limited liability company agreement of GT Network Holdings, LLC, dated August 11, 2022 (“AssetCo”).
1.1.11.“Exit Consideration” means the Cash Consideration and the other covenants, rights and contingent payments expressly set forth in Article 2.
1.1.12.“Generate Affiliate” means any Affiliate of Seller; provided that none of Buyer, the Company, the Common Member, Ting Issuer or any of their respective Subsidiaries shall be deemed to be a Generate Affiliate for purposes of this Agreement.
1.1.13.“Generate Exit Transaction” means the Equity Purchase, the surrender, cancellation and retirement of the Purchased Interests, the release and waiver arrangements, and the other transactions contemplated by this Agreement and the other Transaction Documents.
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
1.1.14.“Governmental Authority” means any foreign, federal, state, commonwealth or local governmental entity or municipality or subdivision thereof or other similar body exercising executive, legislative, judicial, taxing, regulatory or administrative authority or functions of or pertaining to government, or any agency, court, tribunal or judicial or arbitral body, whether public or private.
1.1.15.“Law” or “Laws” means any domestic or foreign federal, state or local laws, whether statutory, common or otherwise, statutes, constitutions, treaties, conventions, ordinances, acts, codes, rules,
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
regulations, orders, determinations or other similar requirements enacted, adopted or promulgated by a Governmental Authority, in each case, as amended, unless expressly specified otherwise.
1.1.16.“Owned Market Sale” means any transaction or series of related transactions involving the sale of all of the assets of Ting Holdco LLC (whether by merger, consolidation, reorganization, sale of equity, sale of assets or similar transaction), in each case with respect to Ting’s Owned Markets. For purposes of this definition, an “Owned Market” is a regional market in which Ting both (a) builds and owns the underlying fiber network infrastructure; and (b) operates as an Internet Service Provider on the built network.
1.1.17.“Post-Closing Injection” means Buyer’s or its Affiliate’s new-money investment into Ting in the amount of $12,500,000 within twelve months following the Closing Date, subject to Section 2.5.
1.1.18.“Redemption Request” means any notice, demand, request, election, instruction or other communication delivered, made or asserted by or on behalf of Seller or any Generate Affiliate requesting, demanding, electing, invoking or purporting to request, demand, elect or invoke any Mandatory Redemption, Optional Redemption, payment of the Redemption Price, redemption, repurchase, retirement, cancellation or similar payment, remedy or action with respect to any Purchased Interest, any Series A Preferred Unit, Seller’s status as Preferred Member or any rights arising under the LLCA, the UPA or any Existing Transaction Agreement.
1.1.19.“Separate Option Agreement” has the meaning set forth in the recitals.
1.1.20.“Tranche C Notes” means the Class C Notes held by Generate or any Generate Affiliate as of the date of this Agreement.
1.1.21.“Transaction Documents” means this Agreement, the instruments of assignment or transfer for the Purchased Interests, the mutual releases set forth in Article 6 or any supplemental mutual release agreement, any Preferred Manager resignation, the documents effecting the Closing DC Purchase, the documents evidencing the Closing Injection and, if applicable, the Post-Closing Injection, [***], and each other agreement, certificate, consent, waiver, instrument or document delivered pursuant to this Agreement or reasonably necessary to give effect to the Generate Exit Transaction and Exit Consideration. For the avoidance of doubt, the Separate Option Agreement is not a Transaction Document.
2.PURCHASE AND SALE; EXIT CONSIDERATION
2.1.Purchase and Sale of Purchased Interests. At the Closing, on the terms and subject to the conditions set forth in this Agreement, Seller hereby sells, assigns, transfers, conveys and delivers to Buyer, and Buyer hereby purchases and acquires from Seller, all of Seller’s right, title and interest in and to the Purchased Interests, free and clear of all Liens other than restrictions on transfer arising under applicable securities Laws in exchange for the Cash Consideration and the other obligations of the Parties set forth in this Agreement and the Transaction Documents. The Cash Consideration shall be paid by Buyer at the Closing by wire transfer of immediately available funds to the account designated by Seller in writing.
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2.3.Excess Proceeds Protection. If during the period beginning on the date hereof and ending twelve months following the Closing Date, Ting, Buyer or any of their respective Affiliates enters into a
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
binding definitive agreement or agreements with respect to a sale of Ting or the equity or assets of Ting or any of its Subsidiaries, whether by merger, consolidation, reorganization, sale of equity, sale of assets or similar transaction, and the consideration paid in such transaction or transactions would provide for value

in excess of the outstanding balance of the ABS Financing, then, upon consummation of the transaction that would provide for such excess value, Buyer shall cause Ting to pay to Generate an amount equal to the Excess Proceeds. For purposes of this Section 2.3, “Excess Proceeds” means the aggregate sale proceeds from such transaction or transactions minus (a) the outstanding balance of the ABS Financing and (b) all amounts previously paid to Generate in respect of the Generate Exit Transaction; provided that Buyer shall first be repaid the aggregate amount of the Closing Injection and the Post-Closing Injection, as applicable, before any payment to Generate under this Section 2.3.
2.4.Tucows Investment Covenant. Buyer shall, or shall cause its applicable Affiliate to, make the Post-Closing Injection within twelve months following the Closing Date. If an Owned Market Sale is consummated before Buyer or its Affiliate has made the Post-Closing Injection, Buyer shall have no obligation to make the Post-Closing Injection.
2.5.Investment Shortfall Payment. If Buyer fails to make, or cause its Affiliate to make, the Post- Closing Injection within twelve months following the Closing Date in circumstances in which the obligation to make the Post-Closing Injection has not been eliminated under Section 2.4, Buyer shall pay to Generate an additional $5,000,000 in cash (the “Investment Shortfall Payment”) within five Business Days after the first anniversary of the Closing Date by wire transfer of immediately available funds.
2.6.Option Expiry Payment. If Ubiquity California, LLC, a Delaware limited liability company (or, for the avoidance of doubt, any of its successors in interest or permitted assigns) does not exercise the option granted under the Separate Option Agreement within the twelve (12) month period following the date of the Separate Option Agreement (as such period may be extended pursuant to the terms thereof), Buyer shall cause Ting to pay to Generate $2,000,000 in cash (the “Option Expiry Payment”) within five Business Days after expiration of such option period by wire transfer of immediately available funds to the account designated by Seller in writing.
2.7.Late-Payment Interest. If Buyer or Ting fails to make any payment to Generate required under this Article 2 on the applicable payment date, interest shall accrue on the overdue amount at a rate of 10% per annum from the payment due date until paid in full, calculated on the basis of a 365-day year and the actual number of days elapsed.
2.8.Tranche C Notes Preserved. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall sell, assign, cancel, release, waive, impair or otherwise affect Generate’s ownership of any Tranche C Notes or Generate’s rights in its capacity as holder of such notes or under the agreements governing such notes.
3.CLOSING; EFFECTIVENESS
3.1.Closing. The Closing shall take place remotely by electronic exchange of signatures and closing deliverables on the date of this Agreement, or by such other method as Buyer and Seller may agree in writing.
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
Transfer and Cancellation Mechanics. Effective upon the Closing, Seller shall cease to own any equity interest in the Company, Buyer shall acquire the Purchased Interests, and Seller shall cease to be a Member, Preferred Member or other equityholder of the Company. Immediately following Buyer’s acquisition of the Purchased Interests, Buyer shall surrender and contribute the Purchased Interests to the Company for cancellation and retirement for no additional consideration, and the Company shall cancel and retire the Purchased Interests. The Company shall promptly update its records in the Company’s Carta online capitalization table management platform to reflect the surrender, contribution, cancellation and retirement of the Purchased Interests. From and after such cancellation and retirement, no Series A Preferred Units or other Purchased Interests shall remain issued or outstanding, and the Purchased Interests shall have no further rights, powers, privileges, preferences, distributions, allocations, approvals, consents, information rights, inspection rights, observer rights, registration rights, preemptive rights, right of first

offer rights, tag-along rights, drag-along rights, conversion rights, redemption rights, call rights, governance rights or other rights under the LLCA, the UPA, any Existing Transaction Agreement or applicable Law, except for rights expressly created by this Agreement, any other Transaction Document or the Separate Option Agreement.
3.2.Schedule of Members. Effective upon the Closing, the Company shall amend and update the Schedule of Members to the LLCA and its books and records to reflect the transactions contemplated by this Agreement. Seller consents to such amendment and update and waives any notice, approval or consent right with respect thereto.
3.3.No Further Preferred Return or Redemption Amount. The Parties acknowledge and agree that, except for the rights expressly created by Article 2, the other Transaction Documents or the Separate Option Agreement, the Exit Consideration is in full satisfaction of all amounts that are, may be or may become payable to Seller or any of its Affiliates in respect of the Purchased Interests, including any Unreturned Series A Capital Balance, Unsatisfied Preferred Return, PIK Preferred Return, Preferred Return, Make- Whole Premium, Redemption Price, Standby Fee, distribution, tax distribution, reimbursement, expense, fee, damages, interest, premium, penalty or other amount of any kind or nature, whether arising under the LLCA, the UPA, any Existing Transaction Agreement, applicable Law or otherwise.
4.CLOSING DELIVERABLES; WAIVERS; ANCILLARY MATTERS
4.1.Buyer and Company Deliverables. At the Closing, Buyer, the Company and Ting Issuer, as applicable, shall deliver, or cause to be delivered, to Seller: (a) the Cash Consideration; (b) duly executed counterparts to this Agreement and the other Transaction Documents to which Buyer, the Company, the Common Member, Ting Issuer or any of their respective Affiliates is a party; (c) evidence reasonably satisfactory to Seller of the approvals required for Buyer, the Company, the Common Member and Ting Issuer to execute, deliver and perform this Agreement and the other Transaction Documents to which they are party; (d) evidence of the Closing Injection and consummation of the Closing DC Purchase; and (e) such other certificates, instruments and documents as Seller may reasonably request to consummate the Generate Exit Transaction.
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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.
4.2.Seller Deliverables. At the Closing, Seller shall deliver, or cause to be delivered, to Buyer and the Company: (a) duly executed counterparts to this Agreement and the other Transaction Documents to which Seller or any applicable Generate Affiliate is a party; (b) an assignment or transfer instrument for the Purchased Interests, in substantially the form attached hereto as Exhibit B, duly executed by Seller; (c) resignations, effective as of the Closing, of each Preferred Manager and each other manager, director, observer, committee member or similar representative appointed, designated or nominated by or on behalf of Seller, the Preferred Member or any of their respective Affiliates by virtue of Seller’s status as Preferred Member or holder of Series A Preferred Units, in substantially the form attached hereto as Exhibit C; (d) evidence reasonably satisfactory to Buyer of the approvals required for Seller and any applicable Generate Affiliate to execute, deliver and perform this Agreement and the other Transaction Documents to which they are party; (e) a properly executed IRS Form W-9 from Seller; and (f) such other certificates, instruments and documents as Buyer or the Company may reasonably request to consummate the Generate Exit Transaction.
4.3.Reserved.
4.4 Waiver of Preferred Rights. Effective upon the Closing, Seller irrevocably waives, relinquishes and releases all rights, powers, privileges and preferences under the LLCA, the UPA and any Existing Transaction Agreement in respect of the Purchased Interests or Seller’s status as Preferred Member, including all governance, approval, consent, veto, information, inspection, observer, conversion, redemption, call, mandatory redemption, optional redemption, return, distribution, preemptive, right of first offer, tag-along, drag-along, funding, expense reimbursement, fee, penalty, premium and enforcement

rights, except for rights expressly created by this Agreement or the other Transaction Documents, rights expressly preserved under Section 2.8, and rights under the Separate Option Agreement.
1.5.Withdrawal of Notices and Claims. Effective upon the Closing, Seller irrevocably withdraws any Redemption Request, Call Exercise Notice, notice of Trigger Event, notice of Return Breach, notice of default, reservation of rights or similar notice delivered under or with respect to the LLCA, the UPA, any Existing Transaction Agreement or the Purchased Interests, including any notice arising from or relating to the Company’s failure to pay Preferred Return or any alleged Return Breach or Trigger Event. Seller covenants not to assert, pursue, support or assist any claim, remedy or position based on any such withdrawn notice or underlying event, except to enforce this Agreement, another Transaction Document, rights expressly preserved under Section 2.8 or the Separate Option Agreement.
1.6.Termination of Future Funding Obligations. Effective upon the Closing, all obligations of Seller and its Affiliates to purchase additional Series A Preferred Units, Milestone Units or other Equity Securities of the Company under the UPA or otherwise, including any obligation with respect to any Milestone Closing, Standby Fee, equity commitment or future funding commitment, are terminated and of no further force or effect. Buyer, the Company and the Common Member release Seller and its Affiliates from any and all claims arising from any failure or alleged failure to make any such purchase or funding.
1.7.Amendment, Waiver and Consent. This Agreement constitutes, to the extent required, an amendment, waiver and consent under the LLCA, the UPA and the Existing Transaction Agreements. Seller, as holder of all issued and outstanding Series A Preferred Units immediately before the Closing, and the Common Member, as holder of all Common Units, approve and consent to this Agreement, the Equity
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Purchase, the surrender, cancellation and retirement of the Purchased Interests, the amendment and update of the Schedule of Members, the termination of Seller’s status as Preferred Member and Member, and the other transactions contemplated hereby, notwithstanding any contrary restriction, approval requirement or procedural requirement in the LLCA, the UPA or any Existing Transaction Agreement.
5.REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Seller. Seller represents and warrants to Buyer, the Company, the Common Member and Ting Issuer, as of the date of this Agreement, that: (a) it is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization; (b) it has all requisite limited liability company power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is party and to consummate the transactions contemplated hereby and thereby; (c) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is party have been duly authorized by all necessary action; (d) this Agreement and each other Transaction Document to which it is party constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity; (e) Seller is the record and beneficial owner of the Purchased Interests, Seller has good and valid title to the Purchased Interests, free and clear of all Liens other than restrictions on transfer arising under applicable securities Laws, and neither Seller nor any Affiliate of Seller owns, directly or indirectly, any Equity Securities of the Company other than the Purchased Interests; (f) Seller has not sold, assigned, transferred, pledged, hypothecated or otherwise encumbered any Purchased Interest or any right or claim relating thereto; (g) no consent, approval, authorization, order, filing or notice is required for Seller to execute, deliver and perform this Agreement and the other Transaction Documents to which it is party, except for consents, approvals, authorizations, orders, filings or notices that have been obtained, made or waived or that would not reasonably be expected to prevent or materially impair consummation of the Generate Exit Transaction; and (h) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is party do not conflict with its organizational documents or any material agreement binding upon it in a manner that would reasonably be expected to prevent or materially impair consummation of the Generate Exit Transaction.

5.1.Representations and Warranties of Buyer, the Company, the Common Member and Ting Issuer. Each of Buyer, the Company, the Common Member and Ting Issuer, severally and not jointly, represents and warrants to Seller, as to itself, as of the date of this Agreement, that: (a) it is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization; (b) it has all requisite power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is party and to consummate the transactions contemplated hereby and thereby; (c) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is party have been duly authorized by all necessary action; (d) this Agreement and each other Transaction Document to which it is party constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity; (e) no consent, approval, authorization, order, filing or notice is required for it to execute, deliver and perform this Agreement and the other Transaction Documents to which it is party, except for consents, approvals, authorizations, orders,
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filings or notices that have been obtained, made or waived or that would not reasonably be expected to prevent or materially impair consummation of the Generate Exit Transaction; and (f) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is party do not conflict with its organizational documents or any material agreement binding upon it in a manner that would reasonably be expected to prevent or materially impair consummation of the Generate Exit Transaction.
5.2.Investment Intent. Buyer is acquiring the Purchased Interests for its own account and not with a view to, or for sale in connection with, any distribution in violation of applicable securities Laws. Buyer is an accredited investor within the meaning of Regulation D under the Securities Act of 1933, as amended, and is capable of evaluating the merits and risks of its purchase of the Purchased Interests.
5.3.Option Agreement. The Company represents and warrants to Seller that the Separate Option Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity.
5.4.Financial Capacity and Solvency. Buyer represents and warrants to Seller that, as of the date of this Agreement, (a) Buyer has, or reasonably expects that it will have at the time any contingent payment obligation under Article 2 becomes due, sufficient funds or access to sufficient funds to satisfy all of its payment obligations under this Agreement and the other Transaction Documents, and (b) Buyer is not insolvent under applicable Law and, after giving effect to the transactions contemplated by this Agreement, will not be rendered insolvent.
5.5.No Other Representations. Except for the representations and warranties expressly set forth in this Agreement or another Transaction Document, no Party makes any representation or warranty, express or implied, with respect to itself, the Purchased Interests, the Company, Ting Issuer, the Closing DC Purchase, the Class C Notes, the Tranche C Notes, any Owned Market Sale, the ABS Financing or any other matter. Each Party disclaims reliance on any representation or warranty not expressly set forth in this Agreement or another Transaction Document.
6.RELEASES
1.1Release by Seller. Effective upon the Closing, Seller, on behalf of itself and its Affiliates and each of their respective former, current and future equityholders, members, managers, directors, officers, employees, agents, representatives, successors and assigns, hereby irrevocably and unconditionally releases, acquits and forever discharges Buyer, the Company, the Common Member, Ting Issuer, their respective Affiliates, and each of their respective former, current and future equityholders, members, managers, directors, officers, employees, agents, representatives, successors and assigns (collectively, the “Buyer Released Parties”) from any and all claims, demands, actions, causes of action, suits, debts,

liabilities, obligations, damages, losses, costs, expenses, rights, remedies and proceedings of any kind, whether known or unknown, suspected or unsuspected, matured or unmatured, contingent or fixed, at law or in equity, that Seller or any of its Affiliates ever had, now has or may have arising out of or relating to Seller’s equity investment in Ting, the Purchased Interests, the LLCA, the UPA, the Existing Transaction Agreements, any Preferred Return, any Redemption Price, any Return Breach, any Trigger Event, any Redemption Request, any Call Exercise Notice or any related transaction documents or facts existing on or
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before the Closing; provided that this release does not release claims for fraud or claims to enforce this Agreement or another Transaction Document, does not release rights expressly preserved under Section 2.8, and does not release claims, rights or obligations arising under or expressly preserved by the Separate Option Agreement or any agreement, assignment, bill of sale, transition services agreement, release, consent or other instrument executed pursuant thereto. Seller, on behalf of itself and its Affiliates, hereby irrevocably covenants and agrees to never commence or institute an action, or to prosecute (or, except to the extent required by Law, in any way aid, assist or cooperate with the commencement, institution or prosecution of) any legal action, or any other proceedings, arising from or based in whole or in part upon the claims, damages, losses, injuries, suits, debts, liabilities, sums of money, accounts, covenants, controversies, demands, actions, rights and causes of action of whatever kind or nature, at law or in equity, released, or attempted or purported to be released, in this Section 6.1.
6.1.Release by Buyer, Company and Common Member. Effective upon the Closing, Buyer, the Company and the Common Member, on behalf of themselves and their Affiliates and each of their respective former, current and future equityholders, members, managers, directors, officers, employees, agents, representatives, successors and assigns, hereby irrevocably and unconditionally release, acquit and forever discharge Seller, its Affiliates, and each of their respective former, current and future equityholders, members, managers, directors, officers, employees, agents, representatives, successors and assigns (collectively, the “Generate Released Parties”) from any and all claims, demands, actions, causes of action, suits, debts, liabilities, obligations, damages, losses, costs, expenses, rights, remedies and proceedings of any kind, whether known or unknown, suspected or unsuspected, matured or unmatured, contingent or fixed, at law or in equity, that Buyer, the Company, the Common Member or any of their Affiliates ever had, now has or may have arising out of or relating to Seller’s equity investment in Ting, the Purchased Interests, the LLCA, the UPA, the Existing Transaction Agreements, any Preferred Return, any Redemption Price, any Return Breach, any Trigger Event, any Redemption Request, any Call Exercise Notice or any related transaction documents or facts existing on or before the Closing; provided that this release does not release claims for fraud or claims to enforce this Agreement or another Transaction Document, and does not release claims, rights or obligations arising under or expressly preserved by the Separate Option Agreement or any agreement, assignment, bill of sale, transition services agreement, release, consent or other instrument executed pursuant thereto. Each of Buyer, the Company and the Common Member, on behalf of themselves and their respective Affiliates, hereby irrevocably covenants and agrees to never commence or institute an action, or to prosecute (or, except to the extent required by Law, in any way aid, assist or cooperate with the commencement, institution or prosecution of) any legal action, or any other proceedings, arising from or based in whole or in part upon the claims, damages, losses, injuries, suits, debts, liabilities, sums of money, accounts, covenants, controversies, demands, actions, rights and causes of action of whatever kind or nature, at law or in equity, released, or attempted or purported to be released, in this Section 6.2.
6.2.Unknown Claims. Each Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to the claims released under this Article 6, and each Party agrees that the releases in this Article 6 shall remain effective in all respects notwithstanding the discovery of such different or additional facts.
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6.3.No Admission. Nothing in this Agreement or any other Transaction Document constitutes an admission of liability, fault, wrongdoing or violation of Law by any Party or any released Person, all of which are expressly denied.
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7.COVENANTS
7.1.Further Assurances. Each Party shall execute and deliver such additional documents, instruments and assurances and take such further actions as may be reasonably necessary or desirable to carry out the provisions of this Agreement and the other Transaction Documents and to give effect to the Generate Exit Transaction.
7.2.Confidentiality and Publicity. The existing confidentiality obligations among the applicable Parties remain in full force and effect and apply to this Agreement, the Generate Exit Transaction and all related discussions and materials. No Party shall make any public announcement regarding this Agreement or the Generate Exit Transaction without the prior written consent of Buyer and Seller, except as required by applicable Law, stock exchange rule or other applicable regulation, in which event the disclosing Party shall (a) use reasonable best efforts to consult with the other Parties in advance to the extent legally permissible and reasonably practicable, (b) provide a draft of the proposed announcement to the other Parties with reasonable advance notice, (c) consider in good faith any reasonable comments timely received from the other Parties on such proposed announcement, and (d) not reference Seller or any of its Affiliates by name in such proposed announcement or disclosure without Seller’s prior written consent; provided that, notwithstanding the foregoing or anything to the contrary in this Section 7.2, Buyer may reference Seller or its Affiliates by name, to the extent such reference is included in any periodic report or other filing that Buyer is required to make with the U.S. Securities and Exchange Commission or any other applicable Governmental Authority or stock exchange as a publicly traded company. Notwithstanding the foregoing, after any public announcement or disclosure has been made in compliance with this Section 7.2, any Party may make further public statements that are consistent with the content of such announcement or disclosure without obtaining any additional consent from the other Parties, provided that any such further public statement referencing Seller or any of its Affiliates by name shall remain subject to clause (d) above.
7.3.Tax Treatment. The Parties shall report the Equity Purchase for U.S. federal and applicable state and local income tax purposes in a manner consistent with its form as a sale by Seller and purchase by Buyer of the Purchased Interests, followed by Buyer’s surrender and contribution of the Purchased Interests to the Company for cancellation and retirement, unless otherwise required by a final determination within the meaning of Section 1313 of the Internal Revenue Code of 1986, as amended. The Parties shall cooperate in good faith to determine any applicable tax reporting and withholding treatment for payments made under this Agreement.
7.4.Survival. The representations and warranties in this Agreement shall survive the Closing for twelve months. The covenants and agreements in this Agreement that by their terms are to be performed after the Closing, including the post-Closing obligations in Article 2 and Article 4, shall survive until fully performed. Article 6 and Article 8 shall survive indefinitely.
8.MISCELLANEOUS
8.1.Notices. All notices, requests, demands, consents and other communications under this Agreement shall be in writing and shall be delivered by personal delivery, nationally recognized overnight courier or electronic mail to the addresses set forth below or to such other address as a Party may designate
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by notice in accordance with this Section 8.1. Notices shall be deemed given upon receipt, except that notices delivered by electronic mail shall be deemed given upon transmission if transmitted before 5:00
p.m. recipient local time on a Business Day and otherwise on the next Business Day, provided that the sender does not receive an automated bounce-back or other delivery failure notice.
8.2.Notice Addresses. The initial notice addresses are as follows: if to Buyer, the Company, the Common Member or Ting Issuer, to Tucows Inc., 96 Mowat Avenue, Toronto, Ontario M6K 3M1, Canada, Attention: Legal, Email: [***]; if to Seller, to Generate Capital, PBC, 560 Davis Street, Suite 250, San Francisco, CA 94111, Attention: Legal Department, Email: [***]
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8.3.Expenses. Except as otherwise expressly provided in this Agreement or another Transaction Document, each Party shall bear its own fees, costs and expenses incurred in connection with this Agreement, the Generate Exit Transaction and the negotiation and preparation of the Transaction Documents.
8.4.Amendments and Waivers. This Agreement may be amended, modified or supplemented only by a written instrument executed by each Party. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument executed by the Party against whom the waiver is to be enforced. No waiver of any breach or default shall be deemed a waiver of any other breach or default.
8.5.Assignment. No Party may assign this Agreement or any of its rights or obligations under this Agreement without the prior written consent of Buyer and Seller, and any attempted assignment without such consent shall be null and void; provided that Buyer may assign this Agreement to an Affiliate without Seller’s consent so long as Buyer remains liable for the performance of its obligations under this Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
8.6.No Third-Party Beneficiaries. Except for the Buyer Released Parties and the Generate Released Parties, each of whom is an express third-party beneficiary of Article 6, nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties and their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.
8.7.Entire Agreement. This Agreement, together with the other Transaction Documents, constitutes the full and entire understanding and agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether written or oral, relating to such subject matter, including the non-binding provisions of the LOI. The binding provisions of the LOI shall terminate as of the Closing and shall be superseded by this Agreement and the other Transaction Documents to the extent they address the same subject matter. For the avoidance of doubt, this Agreement does not supersede the Separate Option Agreement.
8.8.Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect, and the Parties shall negotiate in good faith to replace such invalid, illegal or unenforceable provision with a valid, legal and enforceable provision that most closely reflects the original intent and economic effect of such provision.
8.9.Governing Law. This Agreement, and all claims or causes of action based upon, arising out of or relating to this Agreement or the transactions contemplated hereby, shall be governed by and construed in accordance with the internal Laws of the State of Delaware, without regard to conflict of law principles that would result in the application of any Law other than the Law of the State of Delaware.
8.10.Jurisdiction. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of the state courts of Delaware and the United States District Court for the District of Delaware for any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby. Each Party agrees not to commence any such suit, action or proceeding except in
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such courts, and waives any objection based on personal jurisdiction, venue, forum non conveniens or any similar doctrine.
Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, THE PURCHASED INTERESTS OR THE SUBJECT MATTER HEREOF. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTIES’ ENTRY INTO THIS AGREEMENT, THAT EACH PARTY HAS HAD AN OPPORTUNITY TO REVIEW THIS WAIVER WITH COUNSEL, AND THAT EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

8.11.Specific Performance. Each Party acknowledges that irreparable harm may occur if any provision of this Agreement is not performed in accordance with its terms and that monetary damages may be inadequate. Accordingly, each Party shall be entitled to seek specific performance, injunctive relief and other equitable remedies to enforce this Agreement, in addition to any other remedies available at law or in equity.
8.12.Counterparts; Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Counterparts may be delivered by electronic mail, PDF, DocuSign or other electronic signature or transmission method, and any counterpart so delivered shall be deemed duly and validly delivered and effective for all purposes.
8.13.Interpretation. The headings in this Agreement are for convenience only and shall not affect interpretation. The word “including” means “including without limitation.” References to Sections and Exhibits are references to Sections and Exhibits of this Agreement unless otherwise specified. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted.
8.14.Separate Option Agreement. The Parties acknowledge that the Separate Option Agreement is a standalone agreement and is not a Transaction Document for purposes of this Agreement. This Agreement does not grant, amend, condition, interpret, enforce, release, waive, limit, impair or otherwise address any option, asset transfer, customer transfer, transition service, matters relating to the System Access and Use Agreement (as defined in the Separate Option Agreement), billing dispute, parent guaranty, purchased asset, excluded asset, assumed liability, excluded liability, consent or closing matter under the Separate Option Agreement, all of which shall be governed exclusively by the Separate Option Agreement and any documents executed thereunder.

[Signature pages follow]
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[Signature Page to Unit Purchase and Exit Agreement]

TUCOWS INC.
Buyer

By: /s/ Ivan Ivanov     Name: Ivan Ivanov
Title: Chief Financial Officer





[Signature Page to Unit Purchase and Exit Agreement]

TING ISSUER LLC
Ting Issuer

By: /s/ Ivan Ivanov     Name: Ivan Ivanov
Title: Chief Financial Officer





[Signature Page to Unit Purchase and Exit Agreement]

TING FIBER, LLC
Company

By: /s/ Ivan Ivanov     Name: Ivan Ivanov
Title: Chief Financial Officer



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[Signature Page to Unit Purchase and Exit Agreement]

TUCOWS FIBER, INC.
Common Member

By: /s/ Ivan Ivanov     Name: Ivan Ivanov
Title:    Chief Financial Officer
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[Signature Page to Unit Purchase and Exit Agreement]






GENERATE TF HOLDINGS, LLC
Seller

By: /s/ Harsi Thethi    
Name: Harsi Thethi
Title: Manager
































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Exhibit 31.1
Rule 13a-14(a)/15d-14(a) Certification
I, David Woroch, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date November 05, 2026
/s/ David Woroch
David Woroch
President and Chief Executive Officer


Exhibit 31.2
Rule 13a-14(a)/15d-14(a) Certification
I, Ivan Ivanov, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date November 5, 2026
/s/ Ivan Ivanov
Ivan Ivanov
Chief Financial Officer


Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Woroch, President and Chief Executive Officer of the Company, hereby certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 05, 2026
/s/ David Woroch
David Woroch
President and Chief Executive Officer


Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ivan Ivanov, Chief Financial Officer of the Company, hereby certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(3)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(4)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 05, 2026
/s/ Ivan Ivanov
Ivan Ivanov
Chief Financial Officer