Document:

Exhibit 10.3

Exhibit 10.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

WARRANT TO PURCHASE COMMON STOCK

OF

HEALSPORT, INC.

VOID AFTER JANUARY 6, 2016

This Warrant is issued to Donald N. Raskin and Sharon L. Raskin, as Trustees of the Raskin Family
Trust u/t/a dated January 18, 2008 (the “Holder”) by HEALTHSPORT, INC., a Delaware corporation (the
“Company”), on January 6, 2011. This Warrant is issued pursuant to the terms of that certain Note
and Warrant Purchase Agreement dated as of the date hereof (the “Purchase Agreement”) in connection
with the Company’s issuance and sale of convertible notes dated as of the same date (the
“Convertible Note”). This Warrant is for the purchase of 300,000 shares of common stock at the
exercise price of $0.09 per share subject to any adjustment the conversion shares may be subject
to.

1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth and
compliance with applicable laws, the Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall notify the Holder in
writing), to purchase from the Company for a purchase price of nine cents ($0.09) (the “Exercise
Price”) per share a number of fully paid and nonassessable shares of common stock, $0.0001 par
value per share (“Common Stock”), of the Company, (the “Shares”); provided, however, that if the
Conversion Price per share of the Convertible Notes, as defined in the Purchase Agreement and the
Convertible Note is adjusted as provided in the Purchase Agreement and the Convertible Note, then
the Exercise Price shall equal the Conversion Price as adjusted.

2. Exercise Period. This Warrant shall be exercisable, in whole or in part during the term
commencing on January 6, 2011 (the “Warrant Exercisable Date”) and ending at 5:00 p.m. on January
6, 2016.

3. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance
with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced
hereby. Such exercise shall be effected by:

 

 

 

	 	(a)	 	the surrender of the Warrant, together with a duly executed copy of the
form of Notice of Exercise attached hereto, to the Secretary of the Company at its
principal offices; and

	 	(b)	 	the payment to the Company of an amount equal to the aggregate Exercise
Price for the number of Shares being purchased.

4. Conversion. The Holder may elect to convert this Warrant, without the payment by the Holder
of any additional consideration, into shares of Common Stock equal to the value of this Warrant (or
the portion hereof being cancelled) by surrender of this Warrant to the Secretary of the Company at
its principal office together with a duly executed copy of the form of Notice of Exercise attached
hereto, in which event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

	 	 	 	 	 

	X=

	 	Y(A-B)
	 	 
	 

	 	 	 	 
	 

	A
	 	 

Where: X = The number of shares of Common Stock to be issued to the Holder pursuant to such
conversion.

Y = The number of Shares in respect of which such election to convert is made;

A = The fair market value of one share of Common Stock at the time such election to convert is
made;

B = The Exercise Price (as in effect on such date of the conversion).

For purposes of this Section 4, the fair market value of one share of Common Stock as of a
particular day shall be determined by reference to the average bid and ask price for Common Stock
at the close of trading over the five (5) immediately preceding days on which the relevant market
is open for trading.

5. Certificates for Shares. Upon the exercise of the purchase or conversion rights evidenced
by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as
soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any
event within thirty (30) days of the delivery of the subscription notice.

6. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the
exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens, and charges with respect to the issuance thereof other than those created by
or imposed upon the Holder thereof through no action by the Company.

7. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise or conversion of this Warrant, but in lieu of
such fractional shares the Company shall make a cash payment therefore on the basis of the Exercise
Price then in effect.

 

 

 

8. No Stockholder Rights. Prior to the exercise or conversion of this Warrant, the Holder
shall not be entitled to any rights of a stockholder with respect to the Shares, including (without
limitation) the right to vote such Shares, receive dividends or other distributions thereon,
exercise preemptive rights or to be notified of stockholder meetings, and the Holder shall not be
entitled to any notice or other communication concerning the business or affairs of the Company.
However, nothing in this Section 8 shall limit the right of the Holder to be provided the notices
required under this Warrant.

9. Transfer of Warrant. Subject to compliance with applicable federal and state securities
laws any other contractual restrictions between the Company and the Holder, this Warrant and all
rights hereunder are transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company. The transfer shall be recorded on the books of the Company upon the
surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the
payment to the Company of all transfer taxes and other government charges imposed on such transfer.
In the event of a partial transfer, the Company shall issue to the Holder one or more appropriate
new warrants.

10. Successors and Assigns. The terms and provisions of this Warrant shall inure to the
benefit of, and be binding upon, the Company and the Holder and their respective successors and
assigns.

11. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any
term of this Warrant may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the holders of a
majority of shares of Common Stock issued or issuable upon exercise of Warrants issued pursuant to
the Purchase Agreement. Any waiver or amendment effected in accordance with this Section 11 shall
be binding upon each holder of any Shares purchased under this Warrant at the time outstanding,
each future holder of all such Shares, and the Company.

12. Effect of Amendment or Waiver. The Holder acknowledges that by the operation of Section 11
hereof, the holders of a majority of shares of Common Stock issued or issuable upon exercise of
Warrants issued pursuant to the Purchase Agreement will have the right and power to diminish or
eliminate all rights of such Holder under this Warrant.

13. Notices. All notices required under this Warrant shall be deemed to have been given or
made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the
communication was successfully sent to the applicable number if sent by facsimile; (iii) one day
after being sent, when sent by professional overnight courier service, or (iv) five days after
posting when sent by registered or certified mail. Notices to the Company shall be sent to the
principal office of the Company (or at such other place as the Company shall notify the Holder
hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of
the Company (or at such other place as the Holder shall notify the Company hereof in writing).

 

 

 

14. Attorneys’ Fees. If any action of law or equity is necessary to enforce or interpret the
terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys’ fees,
costs and disbursements in addition to any other relief to which it may be entitled.

15. Captions. The section and subsection headings of this Warrant are inserted for convenience
only and shall not constitute a part of this Warrant in construing or interpreting any provision
hereof.

16. Governing Law. This Warrant shall be governed by the laws of the State of Delaware as
applied to agreements among Minnesota residents made and to be performed entirely within the State
of Delaware without regard to applicable conflict of laws rules.

	 	 	 	 	 
	HEALSPORT, INC.

 	 	 
	
 	 	 
	By:  	Kevin Taheri, Chairman
 	 	 
	 
	Date: January 6, 2011exv4w2

Exhibit 4.2

(FACE OF NOTE)

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS
OF THE INDENTURE AND THE TERMS OF THE SECURITIES, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO AT&T INC., OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

AT&T INC.

5.35% Global Notes due 2040

CUSIP NO.

ISIN NO.

No. R-

$

     AT&T Inc., a corporation duly organized and existing under the laws of the State of Delaware
(herein called “AT&T”, which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of     Million Dollars ($   ), on September 1, 2040 (the “Maturity
Date”), and to pay interest on said principal sum from September 2, 2010 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears
on March 1 and September 1 in each year, commencing on (each an “Interest Payment
Date”) and on the Maturity Date, at the interest rate of 5.35% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such

 

 

Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for such interest, which shall be
the close of business on February 15 or August 15, as the case may be (each, a “Regular Record
Date”), next preceding such Interest Payment Date. Any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less
than 15 days prior to such Special Record Date, or be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the Notes may be listed,
and upon such notice as may be required by such exchange, all as more fully provided in said
Indenture.

     Any money that AT&T deposits with the Trustee or any Paying Agent for the payment of principal
or any interest on this Note that remains unclaimed for two years after the date upon which the
principal and interest are due and payable, will be repaid to AT&T upon AT&T’s request unless
otherwise required by mandatory provisions of any applicable unclaimed property law. After that
time, unless otherwise required by mandatory provisions of any unclaimed property law, the Holder
of this Note will be able to seek any payment to which such Holder may be entitled to collect only
from AT&T.

     If the Notes are issued in definitive form, payment of the principal and interest on this Note
due at the Maturity Date or upon redemption will be made at the Maturity Date or upon redemption,
as the case may be, upon presentation of this Note, in immediately available funds, at the office
of The Bank of New York Mellon, the Paying and Transfer Agent and Registrar for the Notes,
currently located at 101 Barclay Street, New York, New York 10286.

     Payment of interest on this Note due on an Interest Payment Date, other than interest at
maturity or upon redemption, may be paid by check mailed to the address of the Holder entitled
thereto as such address shall appear in the Note register. Notwithstanding the foregoing, (1) the
Depository as Holder of the Notes or (2) a Holder of more than U.S.$5,000,000 in aggregate
principal amount of Notes in definitive form is entitled to require the Paying Agent to make
payments of interest, other than interest due at maturity or upon redemption, by wire transfer of
immediately available funds into an account maintained by the Holder in the United States, by
sending appropriate wire transfer instructions as long as the Paying Agent receives the
instructions not less than ten days prior to the applicable Interest Payment Date.

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

2

 

     IN WITNESS WHEREOF, AT&T INC. has caused this instrument to be signed in its corporate name,
manually or by facsimile, by its duly authorized officers and has caused its corporate seal to be
imprinted hereon.

	 	 	 	 	 
	Dated:     , 2011 	AT&T INC.

 	 
	 	By:  	 	 
	 	 	Richard G. Lindner 	 
	 	 	Senior Executive Vice President

and Chief Financial Officer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Jonathan P. Klug 	 
	 	 	Senior Vice President

and Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 

	Trustee’s Certificate of Authentication	 	 
	 
	 	 	 	 
	This is one of the 5.35% Global Notes due 2040

of the series designated herein referred to

in the within-mentioned Indenture.	 	 
	 
	 	 	 	 
	THE BANK OF NEW YORK MELLON, as Trustee	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

 

 

REVERSE OF NOTE

     This Note is one of a duly authorized issue of debt securities of AT&T of the series specified
on the face hereof, issued under and pursuant to an Indenture, dated as of November 1, 1994,
between AT&T and The Bank of New York Mellon, as Trustee (the “Trustee,” which term includes any
successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto
(collectively, the “Indenture”) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, AT&T and the
Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Notes will be issued in fully registered form only and in denominations of $1,000
and integral multiples of $1,000.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of AT&T and the rights of the Holders of the Notes
under the Indenture at any time by AT&T and the Trustee with the consent of the Holders of a
majority in principal amount of the Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount of the Notes at the
time outstanding to waive compliance by AT&T with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of AT&T, which is absolute and unconditional, to pay the principal
of and interest on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.

     Registrar and Paying Agent

     AT&T shall maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange (“Registrar”) and an office
or agency where Notes may be presented for payment or for exchange (“Paying Agent”). AT&T has
initially appointed the Trustee, The Bank of New York Mellon, as its Registrar and Paying Agent.
AT&T may vary or terminate the appointment of any of its paying or transfer agencies, and may
appoint additional paying or transfer agencies.

     Optional Redemption by AT&T

     The Notes will be redeemable, as a whole or in part, at AT&T’s option, at any time on at least
30 days’, but not more than 60 days’, prior notice mailed to the registered address of each Holder
of the Notes. The redemption price will be equal to the greater of (1) 100% of the principal
amount of the Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled
Payments (as defined below) discounted to the redemption date, on a

 

 

semiannual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal
to the sum of the Treasury Rate (as defined below) and 25 basis points. In either case, accrued
interest will be payable to the redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semiannual equivalent yield to maturity or interpolation (on a day count basis) of the interpolated
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date.

     “Comparable Treasury Issue” means the United States Treasury security or securities selected
by an Independent Investment Banker as having an actual or interpolated maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
a comparable maturity to the remaining term of such Notes.

     “Independent Investment Banker” means one of the Reference Treasury Dealers, appointed by the
Trustee after consultation with AT&T.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City
time, on the third Business Day preceding such redemption date.

     “Reference Treasury Dealer” means each of Credit Suisse Securities (USA) LLC, Deutsche Bank
Securities Inc. and Morgan Stanley & Co. Incorporated and their respective affiliates and, at the
option of the Company, one other nationally recognized investment banking firm that is a primary
U.S. Government Securities dealer in the United States (a “Primary Treasury Dealer”); provided,
however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, we will
substitute therefor another Primary Treasury Dealer.

     “Remaining Scheduled Payments” means, with respect to each Note to be redeemed, the remaining
scheduled payments of principal of and interest on the Note that would be due after the related
redemption date but for the redemption. If that redemption date is not an interest payment date
with respect to a Note, the amount of the next succeeding scheduled interest payment on the Note
will be reduced by the amount of interest accrued on the Note to the redemption date.

 

 

     On and after the redemption date, interest will cease to accrue on the Notes or any portion of
the Notes called for redemption, unless AT&T defaults in the payment of the redemption price and
accrued interest. On or before the redemption date, AT&T will deposit with a Paying Agent or the
Trustee money sufficient to pay the redemption price of and accrued interest on the Notes to be
redeemed on that date. If less than all of the Notes of any series are to be redeemed, the Notes
to be redeemed shall be selected by the Trustee by lot or by such other method as the Trustee in
its sole discretion deems to be fair and appropriate.

     Payment of Additional Amounts

     AT&T will, subject to certain exceptions and limitations set forth below, pay as additional
interest on the Notes such additional amounts (“Additional Amounts”) as are necessary so that the
net payment by AT&T or a Paying Agent of the principal of and interest on this Note to a person
that is a United States Alien Holder, after deduction for any present or future tax, assessment or
governmental charge of the United States or a political subdivision or taxing authority thereof or
therein, imposed by withholding with respect to the payment, will not be less than the amount that
would have been payable in respect of the Notes had no withholding or deduction been required;
provided, however, that the foregoing obligation to pay additional amounts shall not apply:

     (1) to any tax, assessment or governmental charge that is imposed or withheld solely
because the beneficial owner, or a fiduciary, settlor, beneficiary or member of the
beneficial owner if the beneficial owner is an estate, trust or partnership, or a person
holding a power over an estate or trust administered by a fiduciary holder:

     (a) is or was present or engaged in trade or business in the United States or
has or had a permanent establishment in the United States;

     (b) is or was a citizen or resident or is or was treated as a resident of the
United States;

     (c) is or was a foreign or domestic personal holding company, a passive foreign
investment company or a controlled foreign corporation with respect to the United
States or is or was a corporation that has accumulated earnings to avoid United
States federal income tax; or

     (d) is or was a “10-percent shareholder” of AT&T;

     (2) to any Holder that is not the sole beneficial owner of the Notes, or a portion
thereof, or that is a fiduciary or partnership, but only to the extent that the beneficial
owner, a beneficiary or settlor with respect to the fiduciary, or a member of the
partnership would not have been entitled to the payment of an additional amount had such
beneficial owner, beneficiary, settlor or member received directly its beneficial or
distributive share of the payment;

 

 

     (3) to any tax, assessment or governmental charge that is imposed or withheld solely
because the beneficial owner or any other person failed to comply with certification,
identification or information reporting requirements concerning the nationality, residence,
identity or connection with the United States of the Holder or beneficial owner of the
Notes, if compliance is required by statute, by regulation of the United States Treasury
Department or by an applicable income tax treaty to which the United States is a party as a
precondition to exemption from such tax, assessment or other governmental charge;

     (4) to any tax, assessment or governmental charge that is imposed other than by
deduction or withholding by AT&T or a Paying Agent from the payment;

     (5) to any tax, assessment or governmental charge that is imposed or withheld solely
because of a change in law, regulation, or administrative or judicial interpretation that
becomes effective after the day on which the payment becomes due or is duly provided for,
whichever occurs later;

     (6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal
property tax or any similar tax, assessment or governmental charge;

     (7) to any tax, assessment or other governmental charge any paying agent (which term
may include us) must withhold from any payment of principal of or interest on any note, if
such payment can be made without such withholding by any other paying agent; or

     (8) in the case of any combination of the above items.

Except as specifically provided herein, AT&T shall not be required to make any payment with respect
to any tax, assessment or governmental charge imposed by any government or a political subdivision
or taxing authority thereof or therein.

     “United States Alien Holder” means (a) a nonresident alien individual, (b) a foreign
corporation, (c) a foreign partnership or (d) an estate or trust that in either case is not subject
to United States federal income tax on a net income basis or income or gain from a Note.

     Redemption Upon a Tax Event

     If (a) AT&T becomes or will become obligated to pay Additional Amounts as a result of any
change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the
United States (or any political subdivision or taxing authority thereof or therein), or any change
in, or amendment to, any official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment is announced or becomes effective on or
after August 4, 2010, or (b) a taxing authority of the United States takes an action on or after
August 4, 2010, whether or not with respect to AT&T or any of its affiliates, that results in a
substantial probability that AT&T will or may be required to pay such Additional

 

 

Amounts, then AT&T may, at its option, redeem, as a whole, but not in part, the Notes on any
interest payment date on not less than 30 nor more than 60 calendar days’ prior notice, at a
redemption price equal to 100% of their principal amount, together with interest accrued thereon to
the date fixed for redemption. However, AT&T may determine, in its business judgment, that the
obligation to pay these Additional Amounts cannot be avoided by the use of reasonable measures
available to it, not including substitution of the obligor under the Notes. No redemption pursuant
to (b) above may be made unless AT&T shall have received an opinion of independent counsel to the
effect that an act taken by a taxing authority of the United States results in a substantial
probability that AT&T will or may be required to pay the Additional Amounts and AT&T shall have
delivered to the Trustee a certificate, signed by a duly authorized officer stating, that based on
such opinion, AT&T is entitled to redeem the Notes pursuant to their terms.

     Further Issues

     AT&T reserves the right from time to time, without notice to or the consent of the Holders of
the Notes, to create and issue further notes ranking equally and ratably with the Notes in all
respects, or in all respects except for the payment of interest accruing prior to the issue date or
except for the first payment of interest following the issue date of those further notes. Any
further notes will have the same terms as to status, redemption or otherwise as the Notes. Any
further notes shall be issued pursuant to a resolution of the board of directors of AT&T, a
supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture.

     Notes in Definitive Form

     If (1) an Event of Default has occurred with regard to the Notes represented by this Note and
has not been cured or waived in accordance with the Indenture, or (2) the Depository is at any time
unwilling or unable to continue as depository and a successor depository is not appointed by AT&T
within 90 days, AT&T may issue notes in definitive form in exchange for this Note. In either
instance, an owner of a beneficial interest in the Notes will be entitled to the physical delivery
in definitive form in exchange for this Note, equal in principal amount to such beneficial interest
and to have such Notes registered in its name.

     Notes so issued in definitive form will be issued as registered notes in minimum denominations
of $1,000 and integral multiples of $1,000, unless otherwise specified by AT&T.

     Notes so issued in definitive form may be transferred by presentation for registration to the
Registrar at its New York office and must be duly endorsed by the Holder or the Holder’s attorney
duly authorized in writing, or accompanied by a written instrument or instruments of transfer in
form satisfactory to AT&T or the Trustee duly executed by the Holder or his attorney duly
authorized in writing.

     AT&T may require payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any exchange or registration of transfer of definitive
Notes.

 

 

     Default

     In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal hereof may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

     Miscellaneous

     For purposes of the Notes, a Business Day means a Business Day in The City of New York and
London.

     No director, officer, employee or stockholder, as such, of AT&T shall have any liability for
any obligations of AT&T under this Note, the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder by accepting this Note waives and
releases all such liability. The waiver and release are part of the consideration for the issue of
this Note.

     The Notes are the unsecured and unsubordinated obligations of AT&T and will rank pari passu with all other evidences of indebtedness issued in accordance with the Indenture.

     Notices to Holders of the Notes will be published in authorized newspapers in The City of New
York and in London. AT&T is deemed to have given the notice on the date of each publication or, if
published more than once, on the date of the first publication.

     Prior to due presentment of this Note for registration of transfer, AT&T, the Trustee and any
agent of AT&T or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither AT&T, the Trustee
nor any such agent shall be affected by notice to the contrary.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

     The Indenture and this Note shall be governed by and construed in accordance with the laws of
the State of New York.

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