Document:

Exhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT, CONSENT AND CONFIRMATION AGREEMENT

 

This AMENDMENT, CONSENT AND CONFIRMATION AGREEMENT (this “Agreement”) is entered into as of January 11, 2016, among ATLANTIC TELE-NETWORK, INC., a Delaware corporation (“Borrower”), each of the subsidiaries of Borrower identified as guarantors on the signature pages hereto (individually, a “Guarantor” and, collectively, the “Guarantors”; and together with Borrower, individually a “Loan Party” and, collectively, the “Loan Parties”), COBANK, ACB, as Administrative Agent (“Administrative Agent”), and each of the financial institutions executing this Agreement and identified as a Lender on the signature pages hereto (collectively, the “Consenting Lenders”).

 

RECITALS

 

WHEREAS, Borrower, the Guarantors and the Lenders (as defined therein) have entered into that certain Fourth Amended and Restated Credit Agreement, dated as of December 19, 2014 (as amended, modified, supplemented, extended or restated from time to time, the “Credit Agreement”); and

 

WHEREAS, Borrower has requested and the Consenting Lenders, in their capacity as Requisite Lenders under the Credit Agreement, have agreed, subject to the terms and conditions provided herein, to certain consents and amendments with respect to the Loan Documents as more fully described herein.

 

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Agreement, each of Borrower, the Guarantors and the Consenting Lenders hereby agrees as follows:

 

SECTION 1.  Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

SECTION 2.  Consent Regarding KeyTech Transaction; Release of Lien.  Borrower has advised the Lenders that it has formed a wholly owned Subsidiary, ATN Overseas Holdings, Ltd., a Bermuda limited company (“AOH”).  AOH currently is an Excluded Subsidiary and a Restricted Subsidiary.  Borrower further has advised the Lenders that it intends to contribute to AOH all of Borrower’s equity ownership interests in its existing wholly owned Subsidiary, ATN Bermuda Holdings, Ltd., a Bermuda limited company (“ABH”; such contribution, the “ABH Contribution”).  ABH currently is a Material Foreign Subsidiary (and therefore not an Excluded Subsidiary) and a Restricted Subsidiary.  Following, and as a consequence of, the ABH contribution, AOH will become a Material Foreign Subsidiary (and therefore no longer an Excluded Subsidiary) and will continue to be a Restricted Subsidiary, and ABH will become an Excluded Subsidiary (as it no longer will be a Material Subsidiary by virtue of no longer being directly owned by a Loan Party) and will continue to be a Restricted Subsidiary.  The ABH Contribution is prohibited by Subsection 3.7 of the Credit Agreement.

 

 

Amendment, Consent and Confirmation Agreement/Atlantic Tele-Network, Inc.

 

The ABH Contribution is the first step in a series of transactions that will result in AOH acquiring a 51% equity ownership interest in KeyTech Limited, a Bermuda limited liability company (“KeyTech”) in exchange for ABH’s 42.79% equity ownership (controlling) interest in Bermuda Digital Communications Ltd., a Bermuda limited liability company (“BDC”), and approximately $43,000,000 in cash (such acquisition, the “KeyTech Acquisition”).  BDC currently is an Excluded Subsidiary and a Restricted Subsidiary.  From the cash proceeds of the KeyTech Acquisition, KeyTech will make, declare and pay a one-time, non-pro rata cash distribution in an amount not to exceed $13,000,000 in the aggregate to certain of the shareholders of KeyTech existing prior to the KeyTech Acquisition (the “KeyTech Distribution”).  The KeyTech Distribution is prohibited by Subsection 3.5 of the Credit Agreement.

 

In reliance on (1) the representations and warranties of Borrower and the Guarantors contained in this Agreement and in connection with the request of Borrower for the consents and amendments provided herein and (2) the amendments and confirmations provided below, and subject to the effectiveness of this Agreement as described below, each of Administrative Agent and the Consenting Lenders consents to (i) the ABH Contribution and (ii) the KeyTech Distribution; provided that, Borrower shall have delivered to Administrative Agent original certificates evidencing 65% of the equity interests of AOH, together with undated stock powers, in form and substance reasonably acceptable to Administrative Agent.

 

Pursuant to Section 8.6 of the Pledge and Security Agreement, and upon satisfaction of the conditions to the effectiveness of the consent to the ABH Contribution set forth above, Administrative Agent and the Consenting Lenders acknowledge and agree that the Liens and security interest created by the Pledge and Security Agreement in and upon the Collateral consisting of Equity Interests of ABH shall be automatically released upon the consummation of the ABH Contribution and that in connection with such release Administrative Agent, at the request and expense of Borrower, will execute and deliver to Borrower such documents and instruments evidencing such release as Borrower may reasonably request.

 

SECTION 3.  Release of Lien Relating to Assets of Choice.  Borrower has advised the Lenders that it intends to sell the assets of Choice (the “Choice Assets”) to a direct or indirect Subsidiary of ATNI VI Holdings, LLC, a Delaware limited liability company, such sale to be in compliance with the requirements of Subsection 3.7(K) of the Credit Agreement.  Pursuant to Section 8.6 of the Pledge and Security Agreement, upon the sale of the Choice Assets in compliance with Subsection 3.7(K) of the Credit Agreement, Administrative Agent and the Consenting Lenders acknowledge and agree that the Liens and security interest created by the Pledge and Security Agreement in and upon the Collateral consisting of the Choice Assets shall be automatically released upon the consummation of such sale and that in connection with such release Administrative Agent, at the request and expense of Borrower, will execute and deliver to Borrower such documents and instruments evidencing such release as Borrower may reasonably request.

 

SECTION 4.  Amendments to Credit Agreement.  In reliance on the representations, warranties and affirmations of Borrower and the Guarantors contained in this Agreement and in connection with the request of Borrower for the consents and amendments provided herein and 

 

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subject to the effectiveness of this Agreement as described below, the Credit Agreement is hereby amended as set forth below.

 

(A)                             Index of Defined Terms and Subsection 1.1(B)(ii).  Each of the Index of Defined Terms and Subsection 1.1(B)(ii) is amended by replacing the term “Maximum Aggregate Revolver Increase Amount” with the term “Maximum Aggregate Incremental Increase Amount.”

 

(B)                             Section 1.  Section 1 of the Credit Agreement is hereby amended by inserting a new Subsection 1.19 to read in its entirety as follows:

 

1.19                        Incremental Term Loans.

 

(A)                               Borrower may from time to time prior to the latest Maturity Date, request that term loans be made to it in accordance with this Subsection 1.19 (each, an “Incremental Term Loan”) by delivering a Notice of Incremental Term Loan Borrowing to Administrative Agent, specifying (subject to the restrictions set forth in Subsection 1.19(B)) therein (v) the amount of the Tranche of Incremental Term Loans requested (which Tranche shall be in a minimum principal amount of $25,000,000 and integral multiples of $2,500,000 in excess thereof), (w) the requested advance date of the proposed Incremental Term Loans comprising such Tranche (which shall be not less than 10 Business Days from the date of delivery of the Notice of Incremental Term Loan Borrowing (or such shorter period of time as to which Administrative Agent may agree in its sole discretion)), (x) the interest rate option(s) and the applicable margin(s) to be applicable to all Incremental Term Loans in such Tranche and any applicable unused commitment fees, (y) the amortization for all Incremental Term Loans in such Tranche, and (z) the amount of any upfront or closing fees to be paid by Borrower to the Lender(s) funding the Tranche of Incremental Term Loans requested.  Subject to the last sentence in Subsection 1.19(D), each Notice of Incremental Term Loan Borrowing delivered by Borrower shall be irrevocable and shall be binding upon all Loan Parties.

 

(B)                               The aggregate principal amount of all Incremental Term Loan Commitments of all Tranches of Incremental Term Loans made pursuant to this Subsection 1.19 shall not exceed the Maximum Aggregate Incremental Increase Amount.  Repayments of the principal of any Incremental Term Loans may not be reborrowed.  Each Tranche of Incremental Term Loans shall bear interest at the Base Rate or LIBOR Rate plus such applicable margin as is set forth in the Notice of Incremental Term Loan Borrowing related to such Tranche, and shall be subject to the amortization set forth in the applicable Notice of Incremental Term Loan Borrowing relating to such Tranche.  The weighted average life to maturity of any Tranche of Incremental Term Loans shall be equal to or greater than the remaining life of the Revolver Facility and the weighted average life to maturity of any then existing Incremental Term Loan Facility, determined as of the effective date of the Incremental Term Loan Commitment for such Tranche of Incremental Term Loans.  The Maturity Date of any Tranche of Incremental Term 

 

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Loans shall not be prior to the then current Maturity Date of the Revolver Facility.  Any covenant (other than with respect to mandatory repayments and prepayments) or Event of Default applicable to any Tranche of Incremental Term Loans that is more restrictive than the equivalent covenant or Event of Default set forth in this Agreement shall be deemed to be applicable to all Loans hereunder.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, all Incremental Term Loans shall for all purposes be Obligations hereunder and under the Loan Documents.

 

(C)                               Administrative Agent shall deliver a copy of each Notice of Incremental Term Loan Borrowing to such Lenders or other Persons that qualify as an Eligible Assignee as may be determined by Administrative Agent in its reasonable discretion with the approval of Borrower or as may be specified by Borrower with the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed).  Each Lender or new lender that fails to respond to such a notice in writing in a form reasonably acceptable to Administrative Agent within the period of time provided therein (as such period may be extended at the request of Borrower with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed)) shall be deemed to have elected not to participate in such Tranche of Incremental Term Loans.  No Lender or new lender shall have any obligation to fund any Incremental Term Loan, and any decision by a Lender or new lender to fund any Incremental Term Loan shall be made in its sole discretion independently from any other Lender or new lender.

 

(D)                               If in response to the offer to participate in such Tranche made by Administrative Agent pursuant to Subsection 1.19(C), Administrative Agent receives commitments from Lenders and/or from any other Person that (x) qualifies as an Eligible Assignee and (y) has agreed to become a Lender in respect of all or a portion of the applicable Incremental Term Loan (an “Additional Incremental Term Lender”), in excess of the requested Incremental Term Loan, the Administrative Agent shall, with the consent of Borrower, reduce and reallocate (within the minimum and maximum amounts specified by each such Lender or Additional Incremental Term Lender in its notice to Administrative Agent) the shares of the Incremental Term Loan of the Lenders or Additional Incremental Term Lenders willing to fund (or commit to fund) such Incremental Term Loan so that the total committed Incremental Term Loan equals the requested Incremental Term Loan.  If Administrative Agent does not receive commitments from Lenders or Additional Incremental Term Lenders in an amount sufficient to fund the requested Incremental Term Loan, Administrative Agent shall so notify Borrower and the request for such Incremental Term Loan shall either (1) if the amount of the commitments received is equal to or more than the minimum amount specified in subclause (A)(v) of this Subsection 1.19, at the election of the Borrower, either be reduced to equal the amount of the commitments received or be rescinded (in the absence of direction from Borrower, the request for such Incremental Term Loan shall be rescinded), or (2) 

 

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if the amount of the commitments received is less than the minimum amount specified in subclause (A)(v) of this Subsection 1.19, be automatically rescinded.

 

(E)                                An agreement to fund Incremental Term Loans (an “Incremental Term Loan Funding Agreement”) pursuant to this Subsection 1.19 shall become effective upon the receipt by Administrative Agent of an agreement in form and substance reasonably satisfactory to Administrative Agent and Borrower signed by each Loan Party, by each Additional Incremental Term Lender who has agreed to fund such Incremental Term Loans and by each existing Lender who has agreed to fund such Incremental Term Loans, setting forth the new Incremental Term Loans of such Lenders and setting forth the agreement of each Additional Incremental Term Lender, as applicable, to become a party to this Agreement as a Lender and to be bound by all the terms and provisions hereof, together with officer’s certificates and ratification agreements executed by each Loan Party, appropriate corporate authorization on the part of each Loan Party with respect to the requested Incremental Term Loan, amendments to this Agreement and any other Loan Document reasonably requested by Administrative Agent in relation to the requested Incremental Term Loan (which amendments to the Loan Documents Administrative Agent is hereby authorized to execute on behalf of the Lenders), such opinions of counsel for the Loan Parties with respect to the requested Incremental Term Loan and other assurances as Administrative Agent may reasonably request.

 

(F)                                 The principal of the Incremental Term Loans of each Tranche may be prepaid or repaid on such scheduled dates or such customary events (and with customary sharing and order of prepayment) and in such amounts as may be set forth in the Notice of Incremental Term Loan Borrowing for such Tranche of Incremental Term Loans, to be applied to the unpaid principal amount of the Incremental Term Loans for such Tranche for which such payment relates (for purposes of this sentence, the Administrative Agent shall determine “customary” in its reasonable determination); provided, that notwithstanding anything to the contrary contained herein, and for the avoidance of doubt, the prepayment and repayment provisions set forth in Subsection 1.7 of this Agreement (as the same was in effect on May 18, 2012) shall be deemed to be “customary” to the Administrative Agent.  Notwithstanding anything herein to the contrary, the entire outstanding principal balance of the Incremental Term Loans shall be due and payable in full in cash on the applicable Maturity Date.

 

(G)                               Administrative Agent shall record relevant information regarding each Tranche of Incremental Term Loans (including information with respect to Additional Incremental Term Lenders) in the Register in accordance with Subsection 8.1(C); provided, however, that failure to make any such recordation, or any error in such recordation, shall not affect Borrower’s obligations in respect of any Incremental Term Loan Commitment or Incremental Term Loan.

 

(H)                              The obligation of Borrower to repay the aggregate unpaid principal amount of any Incremental Term Loans made to it by each Lender, together with 

 

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interest thereon, shall, at the request of the applicable Lender, be evidenced by an Incremental Term Loan Note, dated the effective date or the date of such request, as applicable, payable to the order of such Lender in a face amount equal to the Incremental Term Loan Commitment of such Lender.

 

(I)                                   On the date of advance of the any Incremental Term Loan, both immediately before and immediately after giving effect to such Incremental Term Loan, (1) Borrower shall be in compliance on a Pro forma Basis with Subsection 4.1, and (2) no Event of Default under clauses (A), (F) or (G) of Subsection 6.1 shall have occurred and be continuing, and Borrower shall deliver to Administrative Agent an officer’s certificate certifying to the immediately preceding clauses (1) and (2).

 

(J)                                   The parties agree that, notwithstanding anything to the contrary contained herein, the amendment requirements contained elsewhere herein including Subsection 9.2, shall not apply to the transactions effected pursuant to this Subsection 1.19.

 

(C)                             Subsection 2.12.  Subsection 2.12 of the Credit Agreement is hereby amended by adding the following text immediately after the first appearance of the text “Excluded Subsidiary” contained in the second paragraph of such Subsection:

 

(other than CAH Holdco).

 

(D)                             Subsection 3.1.  Subsection 3.1 of the Credit Agreement is hereby amended by adding a new clause (O) to read in its entirety as follows:

 

(O)                               the RTFC Indebtedness and the HSBC Indebtedness and any refinancing Indebtedness therefor refinanced on terms consistent with those in Subsection 3.1(F)(ii).

 

(E)                             Subsection 3.3.  Subsection 3.3 of the Credit Agreement is hereby amended by amending clause (N) of Subsection 3.3 to read in its entirety as follows:

 

(N)                               Investments in Unrestricted Subsidiaries in an aggregate amount at any time not in excess of the result of (i) $400,000,000 minus (ii) the aggregate amount of dividends, distributions and redemptions made by Borrower pursuant to clause (C) of the proviso to Subsection 3.5.

 

(F)                              Subsection 3.5.  Subsection 3.5 of the Credit Agreement is hereby amended by amending subclause (iii) of clause (C) of the proviso to Subsection 3.5 to read in its entirety as follows:

 

(iii) the aggregate amount of such dividend, distribution or redemption shall not exceed the result of (x) $125,000,000 minus (y) the sum of (I) any prior dividends, distributions or redemptions actually made or paid, or still required to be made or paid, after the Fourth Amendment and Restatement Date pursuant to 

 

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this clause (C) plus (II) the aggregate amount of all Investments in Unrestricted Subsidiaries at such time in excess of $275,000,000,

 

(G)                            Subsection 3.7.  Subsection 3.7 of the Credit Agreement is hereby amended by amending clause (I) of Subsection 3.7 to read in its entirety as follows:

 

(I) the disposition by a Loan Party or any Restricted Subsidiary of the capital stock or other equity interests in any Excluded Subsidiary (other than the capital stock or other equity interests in CAH Holdco);

 

(H)                            Subsection 10.1. Subsection 10.1 of the Credit Agreement is hereby amended by adding or amending and restating the following definitions to read in their entirety as follows:

 

“Additional Incremental Term Lender” has the meaning set forth in Subsection 1.19(D).

 

“Base Rate Loans” means Loans (or portions thereof as permitted hereunder) accruing interest at a rate determined by reference to the Base Rate.

 

“CAH Holdco” means ATNI VI Holdings, LLC, a Delaware limited liability company.

 

“CAH Holdco Subsidiaries” means the direct and indirect Subsidiaries of CAH Holdco.

 

“Excluded Subsidiary” means (A) any Restricted Subsidiary whose aggregate capital contributions (calculated using fair market value as of the date of such capital contribution) from one or more of the Loan Parties in the aggregate does not exceed $10,000,000 individually or $25,000,000 in the aggregate with all other Restricted Subsidiaries excluded pursuant to this clause (A), (B) any other Restricted Subsidiary with respect to which Administrative Agent, in its sole discretion, in consultation with Borrower, determines the burden or cost or other tax consequences (including any material adverse tax consequences) of becoming a Guarantor shall be excessive in view of the benefits obtained by the Lenders therefrom, (C) any Foreign Restricted Subsidiary that is not a Material Foreign Restricted Subsidiary, (D) any Foreign Restricted Subsidiary Holding Company, (E) any Domestic Restricted Subsidiary that is a Subsidiary of a Foreign Restricted Subsidiary, (F) any Stimulus Recipient Subsidiary that is a Restricted Subsidiary, and (G) CAH Holdco and the CAH Holdco Subsidiaries.

 

“Facility” means, collectively, the Revolver and any Incremental Term Loan Facility.

 

“Hedge Agreements” means interest rate, currency or cross-currency rate swap agreements, and other similar agreements entered into by any Loan Party or any of their Restricted Subsidiaries in the ordinary course of business (and not for speculative purposes) for the principal purpose of protecting any Loan Party or 

 

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any of their Restricted Subsidiaries against fluctuations in interest rate or currency exchange rates.

 

“HSBC” means HSBC Bank Bermuda Limited or any affiliate or assignee thereof.

 

“HSBC Indebtedness” means the Indebtedness incurred by KeyTech and the KeyTech Subsidiaries (i) pursuant to the HSBC Loan Documents in favor of HSBC, in an aggregate principal amount (excluding, for the avoidance of doubt, obligations with respect to interest rate protection and similar agreements) not to exceed $37,000,000 and (ii) in connection with any overdraft facilities existing as of January 11, 2016.

 

“HSBC Loan Agreement” means the Term Loan Facility Agreement among KeyTech, the KeyTech Subsidiaries and HSBC, dated as of September 3, 2014.

 

“HSBC Loan Documents” means, collectively, the HSBC Loan Agreement and the other “Loan Documents” (as defined in the HSBC Loan Agreement) and any interest rate protection and similar agreements entered into in connection therewith.

 

“Incremental Term Lender” means each Lender having an Incremental Term Loan Commitment with respect to any Tranche of the Incremental Term Loan Facility or who has funded or purchased all or a portion of any Incremental Term Loan with respect to any Tranche of the Incremental Term Loan Facility in accordance with the terms hereof.

 

“Incremental Term Loan” has the meaning specified in Subsection 1.19(A); and “Incremental Term Loans” means collectively all of the Incremental Term Loans.

 

“Incremental Term Loan Commitment” means, as to any Lender at any time, the amount initially set forth opposite its name in any Incremental Term Loan Funding Agreement with respect to any Tranche of the Incremental Term Loan Facility, as such commitment is thereafter assigned or modified and “Incremental Term Loan Commitments” means the aggregate Incremental Term Loan Commitments of all of the Lenders with respect to all Tranches of the Incremental Term Loan Facility.

 

“Incremental Term Loan Facility” means the incremental term loan facility established pursuant to Subsection 1.19.

 

“Incremental Term Loan Funding Agreement” has the meaning assigned to such term in Subsection 1.19(E).

 

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“Incremental Term Loan Notes” means the promissory notes of Borrower substantially in the form of Exhibit 10.1(D) hereto evidencing any Tranche of Incremental Term Loans.

 

“KeyTech” means KeyTech Limited, a Bermuda limited liability company.

 

“KeyTech Subsidiaries” means the direct and indirect Subsidiaries of KeyTech.

 

“Lenders” means the Persons listed on Schedule 1.1 and any other Person that shall have become party hereto pursuant to an Assignment and Assumption including any New Revolver Lender becoming a party hereto pursuant to Subsection 1.1(B) or any Additional Incremental Term Lender becoming a party hereto pursuant to Subsection 1.19, but excluding any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context requires otherwise, the term “Lenders” includes the Swingline Lender.

 

“LIBOR Loans” means Loans (other than Swingline Loans) (or portions thereof as permitted hereunder) accruing interest at rates determined by reference to the LIBOR Rate.

 

“Loan Documents” means, collectively, this Agreement, the Notes, the Security Documents, any guaranty and all other instruments, documents and agreements executed and delivered concurrently herewith or at any time hereafter to or for the benefit of Administrative Agent or the Lenders in connection with the Loans and other transactions contemplated by this Agreement, all as amended, modified, supplemented, extended or restated from time to time.

 

“Loans” means collectively all Revolving Loans, Swing Line Loans and Incremental Term Loans or any Revolving Loan, Swing Line Loan or Incremental Term Loan, and “Loan” means the reference to any of the foregoing.

 

“Maturity Date” means the (A) with respect to the Revolver Facility, the Revolver Expiration Date, and (B) with respect to any Incremental Term Loan Facility, the earlier of (i) the date of acceleration of the Obligations in accordance with Subsection 6.3 and (ii) the date set forth in the corresponding Incremental Term Loan Funding Agreement, as such date may be extended in accordance with the terms of the corresponding Incremental Term Loan Funding Agreement.

 

“Maximum Aggregate Incremental Increase Amount” means an aggregate principal amount of the sum of (A) all increases to the Revolver Loan Commitments made pursuant to Subsection 1.1(B) plus (B) all Tranches of Incremental Term Loans made pursuant to Subsection 1.19, not to exceed the sum of (i) $200,000,000 and (ii) the aggregate amount of reductions in the Revolver Loan Commitments made pursuant to Subsection 1.6(B)(i); provided, that the sum of (y) the aggregate amount of Revolver Loan Commitments from time to time 

 

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and (z) the aggregate principal amount of all Incremental Term Loans made pursuant to Subsection 1.19, shall not at any time exceed $425,000,000.

 

“Note” or “Notes” means one or more of the Revolver Notes, the Swingline Note and the Incremental Term Loan Notes.

 

“Notice of Incremental Term Loan Borrowing” means a notice of a Tranche of Incremental Term Loans meeting the requirements of Subsection 1.19.

 

“Notice of Revolving Facility Increase” means a facility increase notice meeting the requirements of Subsection 1.1(B).

 

“Permitted Encumbrances” means the following:

 

(A)                               Liens for taxes, assessments or other governmental charges not yet due and payable or Liens for taxes, assessments or other governmental charges due and payable if the same are being diligently contested in good faith and by appropriate proceedings and then only if and to the extent that adequate reserves therefor are maintained on the books of the Loan Parties and their respective Subsidiaries, as applicable, in accordance with GAAP;

 

(B)                               statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar liens imposed by law, which are incurred in the ordinary course of business for sums not more than 60 days delinquent or which are being diligently contested in good faith; provided, that (i) a reserve or other appropriate provision shall have been made therefor and (ii) such Lien does not adversely affect the operation of a material line of business to which the property relates in a material manner;

 

(C)                               Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security (other than any Lien imposed by the Employee Retirement Income Security Act of 1974 or any rule or regulation promulgated thereunder), or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) in the amount and to the extent permitted by Subsection 3.4;

 

(D)                               deposits and other Liens on insurance policies and the proceeds thereof made in the ordinary course of business to secure liability to insurance carriers, to the extent such liabilities are permitted by Subsection 3.1(K) or Subsection 3.4(C);

 

(E)                                any attachment or judgment Lien which, individually or when aggregated, does not constitute an Event of Default under Subsection 6.1(I) (whether individually or when aggregated with other such Liens);

 

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(F)                                 easements, rights of way, restrictions and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of a material line of business of any Loan Party or any Subsidiary of a Loan Party or materially adversely affecting any material asset or material portion of the Collateral;

 

(G)                               Liens in favor of Administrative Agent, for the benefit of itself and Lenders;

 

(H)                              Liens in favor of CoBank as set forth in Subsection 2.7;

 

(I)                                   Liens securing purchase money security agreements and Capital Leases permitted under Subsection 3.1, provided that, such Liens do not encumber any property other than the items purchased with the proceeds of such Indebtedness or leased pursuant to such Indebtedness (and the proceeds of such property), such Liens do not secure any amounts other than amounts necessary to purchase or lease such items;

 

(J)                                   Liens existing on the assets of any Person that becomes a Subsidiary (or is a Subsidiary that survives a merger with such Person), or existing on assets acquired, pursuant to a Permitted Acquisition and Investment to the extent the Liens on such assets secure Indebtedness permitted by Subsection 3.1(F) or other obligations permitted by this Agreement; provided that, such Liens attach at all times only to the same assets to which such Liens attached (and after-acquired property that is affixed or incorporated into the property covered by such Lien), and secure only the same Indebtedness or obligations that such Liens secured, immediately prior to such Permitted Acquisition and Investment and any modification, replacement, refinancing, refunding, renewal or extension thereof permitted by Subsection 3.1(F);

 

(K)                               Liens (i) of a collecting bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, and (iii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off);

 

(L)                                Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted hereunder to be applied against the purchase price for such Investment, and (ii) consisting of an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted hereunder, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien;

 

(M)                            Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale or purchase of goods entered into by Borrower or

 

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any of its Subsidiaries in the ordinary course of business permitted by this Agreement;

 

(N)                               Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness or (ii) relating to purchase orders and other agreements entered into with customers of Borrower or any Subsidiary in the ordinary course of business;

 

(O)                               Liens solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement arising in connection with a transaction which if consummated would constitute a Permitted Acquisition and Investment;

 

(P)                                 Liens securing Indebtedness permitted by Subsection 3.1(L);

 

(Q)                               customary restrictions in governance and similar documents relating to Joint Ventures, provided such restrictions relate solely to such Joint Venture or the Equity Interests of such Joint Venture; and

 

(R)                               Liens securing the RTFC Indebtedness and the HSBC Indebtedness and any refinancing Indebtedness therefor refinanced on terms consistent with those in Subsection 3.1(F)(ii).

 

“Pro Rata Share” means (A) with respect to the Revolver Facility as of any date of determination, the percentage obtained by dividing (i) the commitment of a Lender under the Revolver Loan Commitment by (ii) the aggregate Revolver Loan Commitment, as such percentage may be adjusted by assignments permitted pursuant to Subsection 8.1 or adjusted with respect to any Revolver Increase pursuant to Subsection 1.1(B); provided that, if the Revolver Loan Commitment is terminated pursuant to the terms hereof, in lieu of commitments, the calculation shall be based on the aggregate amount of Lender’s outstanding Revolver Loans and the aggregate amount of all outstanding Revolver Loans; and, provided that, subject to such reallocations as provided in Subsection 1.17, each Revolver Lender’s Pro Rata Share of any Letter of Credit Usage and of any Swingline Loans shall be determined by reference to such Revolver Lender’s Pro Rata Share of the Revolver Commitment, and (B) with respect to each Tranche of the Incremental Term Loan Facility as of any date of determination, (i) if any Incremental Term Loan Commitments remain in effect with respect to such Tranche, the proportion that an Incremental Term Lender’s unused Incremental Term Loan Commitments with respect to such Tranche bears to the aggregate amount of the Incremental Term Loan Commitments of all of the Incremental Term Loan Lenders for such Tranche as of such date, or (ii) if the Incremental Term Loan Commitments have been terminated or have expired with respect to such Tranche, the proportion that the outstanding principal amount of an Incremental Term Loan Lender’s Incremental Term Loans with respect to such

 

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Tranche as of such date bears to the aggregate principal amount of all outstanding Incremental Term Loans for such Tranche as of such date.

 

“Requisite Lenders” means at least two Lenders (other than Defaulting Lenders and including Voting Participants) having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders (other than Defaulting Lenders); provided that such two Lenders (including Voting Participants) may not consist solely of Voting Participants who purchased their participations from the same Lender or of Voting Participants and the Lender who sold such participations to such Voting Participants.  With respect to economic changes applicable only to one of the Facilities, “Requisite Lenders” shall be calculated with respect to only the Lenders (other than any Defaulting Lender and including Voting Participants) holding Loans or Commitments of the applicable Credit Facility.

 

“RTFC” means Rural Telephone Finance Cooperative or any affiliate or assignee thereof.

 

“RTFC Indebtedness” means the Indebtedness incurred by CAH Holdco and the CAH Holdco Subsidiaries pursuant to the RTFC Loan Documents in favor of RTFC in an aggregate principal amount (excluding, for the avoidance of doubt, obligations with respect to interest rate protection and similar agreements) not to exceed $60,000,000.

 

“RTFC Loan Agreement” means a Loan Agreement among CAH Holdco, CAH Holdco Subsidiaries and RTFC, to be entered into in connection with CAH Holdco’s acquisition of all of the equity ownership interests of Caribbean Assets Holdings LLC.

 

“RTFC Loan Documents” means, collectively, the RTFC Loan Agreement and the “Other Agreements” (as defined in the RTFC Loan Agreement) and any interest rate protection and similar agreements entered into in connection therewith.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Revolver Commitments, the unused Incremental Term Loan Commitments, the Revolving Credit Obligations and the outstanding Incremental Term Loans of such Lender at such time.

 

“Tranche” means, with respect to any Incremental Term Loans, all Incremental Term Loans made on the same date pursuant to the terms of the same Notice of Incremental Term Loan Borrowing and Incremental Term Loan Funding Agreement.

 

SECTION 5.  No Novation.  This Agreement shall not constitute a novation of the Credit Agreement or any other Loan Document.  Except as expressly provided in this Agreement, the execution and delivery of this Agreement does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with

 

13

 

the provisions of, the Loan Documents, and the Loan Documents shall remain in full force and effect.

 

SECTION 6.  Representations and Warranties.  Each of the Loan Parties hereby represents and warrants to the Lenders as follows:

 

(A)                             Such Loan Party has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Agreement in accordance with its terms.  This Agreement has been duly executed and delivered by such Loan Party and is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and general principles of equity.

 

(B)                             The execution, delivery and performance of this Agreement in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise,

 

(1)                                   require any Governmental Approval (except as previously obtained) or violate any Applicable Law relating to such Loan Party;

 

(2)                                   materially conflict with, result in a material breach of or constitute a material default under the organizational documents of such Loan Party;

 

(3)                                   conflict with, result in a breach of or constitute a default under any Governmental Approval relating to such Person except as would not reasonably be expected to have a Material Adverse Effect; or

 

(4)                                   result in or require the creation or imposition of any Lien (except as permitted by the Loan Documents) upon or with respect to any property now owned or hereafter acquired by such Loan Party.

 

(C)                               The representations and warranties of such Loan Party set forth in the Loan Documents are true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except for any representation or warranty limited by its terms to a specific date.

 

(D)                               No event shall have occurred and be continuing that constitutes an Event of Default or a Default.

 

SECTION 7.  Borrower Confirmations.  Borrower hereby confirms and agrees that (a) each Security Document is and shall continue to be in full force and effect, and (b) the obligations secured by each such document include any and all obligations of the Loan Parties to the Secured Parties under the Credit Agreement as amended hereby and the consents granted herein.

 

SECTION 8.  Guarantor Confirmations.  Each of the Guarantors hereby confirms and agrees that (a) its guarantee contained in the Credit Agreement and each Security Document to which it is a party is and shall continue to be in full force and effect, and (b) the obligations

 

14

 

guaranteed or secured by each such applicable document include any and all obligations of the Loan Parties to the Secured Parties under the Credit Agreement as amended hereby and the consents granted herein.

 

SECTION 9.  Effectiveness of this Agreement.  This Agreement shall be effective only upon receipt by Administrative Agent of (i) an execution counterpart hereto signed by Borrower, each Guarantor, and the Requisite Lenders, (ii) payment by Borrower of all fees and expenses as provided in that letter, dated the date hereof, from the Administrative Agent to Borrower, and (iii) Borrower shall have delivered to Administrative Agent original certificates evidencing 100% of the equity interest of ATNI VI Holdings, LLC, a Delaware limited liability company, together with undated stock powers, in form and substance reasonably acceptable to Administrative Agent.

 

SECTION 10.  Costs and Expenses.  Borrower agrees to pay to Administrative Agent, on demand, all reasonable and documented out-of-pocket costs and expenses incurred by Administrative Agent, including, without limitation, the reasonable and documented fees and expenses of counsel retained by Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Agreement and all other instruments and documents contemplated hereby.

 

SECTION 11.  Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted successors and assigns, and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 12.  Governed under Provisions of Loan Agreement.  This Agreement shall be governed by and shall be construed and enforced in accordance with all provisions of the Credit Agreement, including the governing law provisions thereof.

 

[Signatures Follow on Next Page.]

 

15

 

Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

BORROWER:

 

	
 
    	
ATLANTIC   TELE-NETWORK, INC.
    
	
 
    	
 
    
	
 
    	
/s/   Justin D. Benincasa
    
	
 
    	
Justin   D. Benincasa
    
	
 
    	
Chief   Financial Officer and Treasurer
    
	
GUARANTORS:
    	
 
    
	
 
    	
COMMNET   WIRELESS, LLC
    
	
 
    	
COMMNET   FOUR CORNERS, LLC
    
	
 
    	
COMMNET   MIDWEST, LLC
    
	
 
    	
COMMNET   OF ARIZONA, L.L.C.
    
	
 
    	
GILA   COUNTY WIRELESS, LLC
    
	
 
    	
EXCOMM,   L.L.C
    
	
 
    	
SOVERNET   HOLDING CORPORATION
    
	
 
    	
COMMNET   OF NEVADA, LLC
    
	
 
    	
TISDALE   NEBRASKA, LLC
    
	
 
    	
TISDALE   TELEPHONE COMPANY, LLC
    
	
 
    	
COMMNET   OF GEORGIA, LLC
    
	
 
    	
ALLIED   WIRELESS COMMUNICATIONS CORPORATION
    
	
 
    	
CHOICE   COMMUNICATIONS, LLC
    
	
 
    	
COMMNET   NEWCO, LLC
    
	
 
    	
COMMNET   OF TEXAS, LLC
    
	
 
    	
ESSEXTEL, INC.
    
	
 
    	
NATIONAL   MOBILE COMMUNICATIONS CORPORATION
    
	
 
    	
 
    
	
 
    	
/s/   Justin D. Benincasa
    
	
 
    	
Justin   D. Benincasa
    
	
 
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
SOVERNET, INC.
    
	
 
    	
 
    
	
 
    	
/s/   Justin D. Benincasa
    
	
 
    	
Justin   D. Benincasa
    
	
 
    	
Vice   President, Chief Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
SAL   SPECTRUM LLC
    
	
 
    	
By:   Atlantic Tele-Network, Inc., its Sole Member
    
	
 
    	
 
    
	
 
    	
/s/   Justin D. Benincasa
    
	
 
    	
Justin   D. Benincasa
    
	
 
    	
Treasurer
    

 

[Signatures continued on following page]

 

 

[Signatures continued from previous page]

 

 

	
 
    	
COBANK,   ACB, as   Administrative Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gary Franke
    
	
 
    	
 
    	
Gary   Franke
    
	
 
    	
 
    	
Vice   President
    

 

[Signatures Continued on Following Page.]

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
THE BANK   OF NOVA SCOTIA, as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paula J. Czach
    
	
 
    	
 
    	
Name:   Paula J. Czach
    
	
 
    	
 
    	
Title:   Managing Director
    

 

[Signatures Continued on Following Page.]

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
FIFTH   THIRD BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Valerie Schanzer
    
	
 
    	
 
    	
Name:   Valerie Schanzer
    
	
 
    	
 
    	
Title:   Managing Director
    

 

[Signatures Continued on Following Page.]

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
MUFG   UNION BANK, N.A.,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Hill
    
	
 
    	
 
    	
Name:   David Hill
    
	
 
    	
 
    	
Title:   Director
    

 

[Signatures Continued on Following Page.]

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
AGFIRST   FARM CREDIT BANK,   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bruce B. Fortner
    
	
 
    	
 
    	
Name:   Bruce B. Fortner
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
AMERICAN   AG CREDIT, FLCA, as   a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bradley K. Leafgren
    
	
 
    	
 
    	
Name:   Bradley K. Leafgren
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
FARM   CREDIT EAST, ACA,   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kerri B. Sears
    
	
 
    	
 
    	
Name:   Kerri B. Sears
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
FARM   CREDIT BANK OF NEW MEXICO, FLCA, a wholly-owned subsidiary of Farm Credit of New Mexico, ACA, as a   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gerald F. Briese
    
	
 
    	
 
    	
Name:   Gerald F. Briese
    
	
 
    	
 
    	
Title:   VP/ Agribusiness
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
FARM CREDIT   WEST, FLCA, as a   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert Stornetta
    
	
 
    	
 
    	
Name:   Robert Stornetta
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
FARM   CREDIT BANK OF TEXAS,   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nicholas King
    
	
 
    	
 
    	
Name:   Nicholas King
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

[Signatures Continued from Previous Page.]

 

 

	
 
    	
NORTHWEST   FARM CREDIT SERVICES,   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeremy A. Roewe
    
	
 
    	
 
    	
Name:   Jeremy A. Roewe
    
	
 
    	
 
    	
Title:   Vice PresidentExhibit 4.1

 

THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY
OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED
IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.  THIS LEGEND SHALL
BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 

 

	Principal
    Amount: $[_______________]	Issue
    Date: ______ __, 2015

 

INTELLIGENT
CLOUD RESOURCES, INC.

 

10%
CONVERTIBLE PROMISSORY NOTE

 

FOR
VALUE RECEIVED, Intelligent Cloud Resources, Inc., a corporation organized under the laws of the State of Nevada (hereinafter
called “Borrower” or the “Company”), hereby promises to pay to [_______________________]
, an individual with an address at _____________________________, ________ or his permitted registered assigns or successors
in interest or order (the “Holder”), without demand, the sum of [_______________________] (the
“Principal Amount”), with simple interest at the annual rate of ten percent (10%). The “Maturity Date”
of this Note shall be the date that is eighteen (18) months from the date hereof, subject to conversion and acceleration as provided
in Section 2 or Section 3 hereof.

 

This
10% Convertible Promissory Note (the “Note”) has been executed and issued pursuant to the terms of a Securities
Purchase and Exchange Agreement for a loan between the Borrower and the Holder and certain other Holders of Notes, dated of even
date herewith (the “Purchase Agreement”) pursuant to which the Holder acquired this Note and Common Stock Purchase
Warrants. This Note is not secured and is convertible as provided herein. Unless otherwise separately defined herein, all capitalized
terms used in this Note shall have the same meaning as is set forth in the Purchase Agreement. The following terms shall apply
to this Note:

 

ARTICLE
I

INTEREST

 

1.1.Interest
Rate. Interest on this Note shall be simple interest and accrue at the annual rate of ten percent (10%) per annum. Interest
will be payable semi-annually. The first / initial interest payment shall be made in advance in cash or Common Stock (at the discretion
of the Company) at $0.50 per share, with said initial Interest pre-payment to be made within 2 business days of the first closing.
Thereafter, all interest payments shall be made in arears with the second interest payment on the first anniversary date of the
date hereof, and the subsequent Interest payments on the date that falls on each six (6) month anniversary thereafter that this
Note is outstanding, in each case with Interest payable in cash or Common Stock at the discretion of the Borrower, with stock
to be valued based on the Value Added Weighted Average of the Common Stock price for 10 days before (the “10 Day VWAP”)
the applicable interest due date. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual
days elapsed in the period for which such interest is payable.

 

    	 	1	 

     

    

 

ARTICLE
II

CONVERSION
RIGHTS

 

2.1.      Holder’s
Voluntary Conversion Rights.

 

(a)        For so long as this Note
remains outstanding and not fully paid, the Holder shall have the right, but not the obligation, to convert all or any portion
of the then aggregate outstanding Principal Amount of this Note, together with any accrued and unpaid interest thereon, into shares
of Common Stock of the Borrower or its successor in interest (the “Conversion Shares”), subject to the terms and conditions
set forth in this Article II, at $0.50 per share of Company common stock (the “Common Stock”) (as may be adjusted as
provided herein, the “Conversion Price”), which transaction may be referred to herein as a “Subsequent Financing”.
The Holder may exercise such right by delivery to the Borrower of a written Notice of Conversion pursuant to Section 2.2. For the
purposes of this Note “Common Stock Equivalents” means any securities of the Company which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or
other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof
to receive, Common Stock.

 

(b)      If an Event of Default (as
hereinafter defined) has occurred, then the Conversion Price shall be reduced, but not increased to the price set forth in Section
2.6 below, but shall continue to be subject to adjustment pursuant to Section 2.3 below.

 

2.2.     Mechanics
of Holder’s Conversion. In the event To effect conversions hereunder, the Holder shall not be required to physically
surrender this Note to Borrower unless the entire principal amount of this Note has been so converted. No fractional Conversion
Shares shall be issued upon conversion of this Note. Instead of any fractional shares that would otherwise be issuable upon conversion
of this Note, the Borrower shall pay a cash adjustment in respect of such fractional share in an amount equal to the same fraction
of the Conversion Price then in effect.

 

2.3.     Adjustments
to Conversion Price.

 

(a)       The
number of Conversion Shares to be issued upon each conversion of this Note pursuant to this Section 2 shall be determined by dividing
that portion of the Principal Amount and interest to be converted, if any, by the then applicable Conversion Price.

 

    	 	2	 

     

    

 

(b)       The
Conversion Price and number and kind of shares or other securities to be issued upon conversion shall be subject upon the happening
of certain events while this conversion right remains outstanding, as follows:

 

i.       Merger,
Sale of Assets, etc. If (A) the Company effects any merger or consolidation of the Company with or into another entity, (B)
the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender
offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares of Common Stock for other securities, cash or property, (D) the Company consummates
a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50%
of the outstanding Common Stock (not including any shares of Common Stock held by such other persons or entities making or party
to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other
business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d)
and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (in any such case, a "Fundamental Transaction"), this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into
such number and kind of shares or other securities and property as would have been issuable or distributable on account of such
Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental
Transaction. The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the provisions of this Section shall apply to such securities
of such successor or purchaser after any such Fundamental Transaction.

 

ii.      Reclassification, etc. If the Company at any time shall, by reclassification or otherwise, change the Common Stock into
the same or a different number of securities of any class or classes, this Note, as to the unpaid principal portion hereof and
accrued interest hereon, shall thereafter be deemed to evidence the right to convert into an adjusted number of such securities
and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior
to such reclassification or other change.

 

iii.     Stock
Splits, Combinations and Dividends. If the Common Stock are subdivided or combined into a greater or smaller number of shares
of Common Stock, or if a dividend is paid on the Common Stock by issuance of Common Stock, the Conversion Price shall be proportionately
reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares,
in each such case by the ratio which the total number of Common Stock outstanding immediately after such event bears to the total
number of shares of Common Stock outstanding immediately prior to such event.

 

(d)      Whenever
the Conversion Price is adjusted pursuant to this Section 2.3, the Company shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

 

2.4      Issuance
of Replacement Note. Upon any loss or destruction of this Note, a replacement Note containing the same date and provisions
of this Note shall be issued by the Company to the Holder for the outstanding Principal Amount of this Note and accrued interest
which shall not have been converted or paid.

 

    	 	3	 

     

    

 

2.5      Notice
of Conversion. Notice of Conversion shall be transmitted by the Borrower’s transfer agent to the Holder by (i) crediting
the account of the Holder’s broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)
system if the Company is then a participant in such system and either (A) there is an effective registration statement permitting
the resale of the Conversion Shares by the Holder or (B) the Conversion Shares are eligible for resale without volume or manner-of-sale
limitations pursuant to Rule 144, or (ii) if the conditions specified in (i)(A) or (i)(B) are not satisfied, by physical delivery
to the address specified by the Registered Holder in the Notice of Exercise.

 

2.6     Default Conversion Price. If an Event of Default has occurred and continued beyond the grace period or time to cure set
forth in Article III below, then, in addition to and without limitation of, any other remedies available at law or in equity,
the Conversion Price shall be permanently reduced (and number of Conversion Shares receivable thereby increased) to the lesser
of $0.25 per Conversion Share or the 10 Day VWAP price then in effect on the date of default. Notwithstanding the foregoing, the
Conversion Price shall continue to be subject to adjustment for a subsequent financing as provided in Section 2.4 above.

 

2.7     Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not
have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together
with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder
and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which
such determination is being made, but shall exclude the number of shares of Common Stock that are issuable upon (i) conversion
of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2.7,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 2.7 applies, the determination of the extent to which
this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal
amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion
shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities
owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject
to the Beneficial Ownership Limitation. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this
Section 2.7, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written
notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then-outstanding. In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less
than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2.7 or waive it entirely, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion
of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 2.7 shall continue to apply.
Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial
Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2.7 to correct this paragraph (or any portion hereof) that may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The Holder may, at any time that the Borrower is not registered and required to file periodic
reports pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”), waive all of the foregoing
restrictions of this Section 2.7 by 3 days written notice. 

 

    	 	4	 

     

    

 

EVENTS
OF DEFAULT

 

3.1     The occurrence of any of the following events of default (“Event of Default”) shall, at the option of the Holder
hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately
due and payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth
below:

 

3.2     Failure to Pay Principal or Interest. The Borrower fails to pay any the Principal Amount, interest or other sum due under
this Note when due and such failure continues for a period of ten (10) business days after receipt by the Borrower of written
notice of such default.

 

3.3     Breach of Covenant. The Borrower breaches any material covenant or other term or condition of this Note (including, and
without limitation, any covenants set forth in the Securities Purchase Agreement), or in the notes contemplated to be issued in
a Subsequent Financing, in any material respect and such breach, if subject to cure, continues for a period of 10 business days
after written notice to the Borrower from the Holder, provided that if such breach cannot reasonably be cured within such 10-day
period and Borrower shall have commenced to cure such breach within such 10-day period and thereafter diligently proceeds to cure
the same, such 20-day period shall be extended for so long as it shall require the Borrower in the exercise of due diligence to
cure such default, not to exceed 45 business days in the aggregate.

 

3.4     Breach of Representations and Warranties. Any material representation or warranty of the Borrower made in the Purchase
Agreement shall be false or misleading in any material respect as of the Issue Date, except to the extent such representation
or warranty is made as of a different date in which case such representation or warranty shall have been false or misleading in
any material respect as of such date.

 

3.5      Receiver or Trustee. The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for them or for a substantial part of their property or business;
or such a receiver or trustee shall otherwise be appointed and not dismissed within 60 calendar days.

 

3.6      Judgments. Any money judgment, writ or similar final process shall be entered or filed against Borrower or any subsidiary
of Borrower or any of their property or other assets for more than $250,000, and shall remain unvacated, unbonded, unappealed,
unsatisfied, or unstayed for a period of 60 calendar days.

 

    	 	5	 

     

    

 

3.7      Non-Payment. A default by the Borrower under any one or more obligations (including, without limitation, any office lease
or pre-existing loan currently outstanding) in an aggregate monetary amount in excess of $100,000 for more than 90 calendar days
after the due date, unless the Borrower is contesting the validity of such obligation in good faith and has segregated cash funds
equal to not less than one-half of the contested amount.

 

3.8      Bankruptcy. Bankruptcy, insolvency, reorganization, or liquidation proceedings or other proceedings or relief under any
bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted
by or against the Borrower or any Subsidiary of Borrower and if instituted against them are not dismissed within 60 calendar days
of initiation.

 

3.9      Sale of Assets. A disposition of all or substantially all of the assets of the Borrower (excluding any transaction relating
to the sale and lease back of the Borrower’s equipment).

 

3.10    Failure to Deliver Common Stock or Replacement Note. Borrower’s failure to timely deliver Conversion Shares to the
Holder pursuant to and in the form required by this Note or the Purchase Agreement.

 

3.11    Use of Proceeds. Proceeds of this Note not being utilized substantially in accordance with the intended uses set forth
in the Purchase Agreement and the related offering document and for no other purposes.

 

3.12    Cross Default. A default by the Borrower of a material term, covenant, warranty or undertaking of any Transaction Document
(including, and without limitation, those covenants of Borrower set forth in the Purchase Agreement) which is not cured after
any required notice and/or cure period.

 

3.13    Reservation Default. Failure by the Borrower to have reserved for issuance upon conversion of the Note the amount of Common
Stock as set forth in this Note and the Purchase Agreement.

 

ARTICLE
IV

MISCELLANEOUS

 

4.1      Failure
or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

 

    	 	6	 

     

    

 

4.2     Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein,
shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, electronic mail or
facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.
Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery,
electronic mail or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, if sent
by electronic mail with confirmed receipt, at the address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur.

 

If
to the Borrower:

Intelligent
Cloud Resources Inc.

2602
Innisfil Road,

Mississauga,
Ontario, Canada L5M 4H9

Attn:
Rehan Saeed, Chief Financial Officer

 

With
a copy to (which shall not constitute notice):

Szaferman,
Lakind, Blumstein & Blader, P.C.

101
Grovers Mill Road, Suite 200

Lawrenceville,
NJ 08648

Attention:
Gregg Jaclin, Esq.

gjaclin@szaferman.com

 

If
to the Purchaser:            At the address set forth on the Purchaser’s Signature to the Purchase Agreement

 

With
a copy to: 

 

4.3      Amendment
Provision. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
as originally executed, or if later amended or supplemented or reissued, then as so amended or supplemented or reissued.

 

4.4      Assignees.
This Note, and the conversion rights described herein, shall not be assignable by the Holder without the prior written consent
of the Borrower, which shall not be unreasonably withheld. Subject to the restrictions of the preceding sentence, the rights and
obligations of the Borrower and the Holder shall be binding upon and benefit the successors, assign, heirs, administrators and
transferees of the parties.

 

4.5      Cost
of Collection. In the event that Holder is required to take legal or other action to enforce its rights or obtain collection
under this Note, Borrower shall pay the Holder hereof reasonable costs of collection, or enforcement of the terms hereof, including
attorneys’ fees.

 

4.6      Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, including, but
not limited to, New York statutes of limitations. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the State Supreme Court of the State of New York, County of New York (or
any federal courts having jurisdiction of such area). Both parties and the individual signing this Agreement on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees and costs. In the event that any provision of this Note is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to realize on any collateral or any other security for such obligations, or to enforce a judgment or other
decision in favor of the Holder.

 

    	 	7	 

     

    

 

4.7      Maximum
Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law (such as, without limitation, the usury laws), any payments in excess of such
maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower, or if no further
amounts are owed by the Borrower to the Holder, shall be refunded to the Borrower. Borrower hereby irrevocable consents to the
reformation of this Note, as may be necessary by a court of law, so as to enable enforcement of this Note pursuant to summary
judgment or summary proceeding. For avoidance of doubt, in the event that, for any reason, a finding by a court having jurisdiction
over this Note is made that limits enforceability as a result of excessive interest or other origination or investment banking
fees pursuant to the laws of any jurisdiction, then, such defense shall not be deemed to bar a summary proceeding or summary judgment
on the Note but rather, the Note shall be fully and absolutely enforceable as to all principal and, the court having jurisdiction
shall, after an inquest, have power to reform the Note so as to reduce interest amount to such amount as is immediately enforceable
pursuant to summary judgment or summary proceeding and grant such award, plus any legal or enforcement fees of Holder(s).

 

4.8      Construction
and Enforcement. Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in
the interpretation of this Note to favor any party against the other. This Note reflects an investment made by Holder or its assignor
to the Borrower. This Note is intended as, and shall be deemed an unconditional obligation of Borrower for the payment of money
only and, without limitation to any other remedies of Holder (such as, without limitation, summary judgment after initiation of
a proceeding, or equitable remedies), shall be enforceable against Borrower by summary proceeding in lieu of or after filing of
a complaint, pursuant to New York Civil Procedure Law Rule 3213, or any similar rule or statute in the jurisdiction where enforcement
is sought. For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which
Borrower delivered to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s
obligations to Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith
or was executed apart from this Note.

 

4.9      Redemption.
This Note may be prepaid by the Borrower, in whole or in part, at any time and from time to time, without premium or penalty,
upon 30 days’ prior written notice to the Holder.

 

4.10      Shareholder
Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note.
However, the Holder will have the rights of a shareholder of the Borrower with respect to the Shares of Common Stock to be received
after delivery by the Holder of a Conversion Notice to the Borrower.

 

4.11      Non-Business
Days. Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws
of the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such
payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

[signature
page follows]

 

    	 	8	 

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ____ day of November
2015.

 

	 	Intelligent Cloud Resources, INC.
	 	 	 
	 	 	 
	 	By:	Rehan
    Saeed
	 	Title:	Chief
    Financial Officer

 

[Signature
Page to 10% Convertible Promissory Note of Legacy Ventures International, Inc. ]

 

    	 	9	 

     

    

 

NOTICE
OF CONVERSION

 

(To be
executed by the Registered Holder in order to convert the Note)

 

Date of
Conversion/Exchange:_______________________________________________________________

 

Conversion
Price:___________________________________________________________________

 

Shares
To Be Delivered:______________________________________________________________

 

Signature:_________________________________________________________________________

 

Print
Name:_______________________________________________________________________

 

Address:__________________________________________________________________________

 

__________________________________________________________________________

 

 

 

 

10

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