Document:

Third Amendment to Credit Agreement

 Exhibit 10.1 
 THIRD AMENDMENT 
 TO CREDIT AGREEMENT 

This Third Amendment to Credit Agreement (this “Amendment”) is entered into as of December 7, 2012, by and among
the Lenders identified on the signature pages hereof (such Lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the
“Lenders”), BMO Harris Bank N.A., formerly known as Harris N.A., as administrative agent for the Lenders (in such capacity, “Agent”), and Cobra Electronics Corporation, a Delaware corporation
(“Borrower”). 
 WHEREAS, Borrower, Agent, and the Lenders are parties to that certain Credit Agreement dated
as of July 16, 2010 (as amended, modified or supplemented from time to time, the “Credit Agreement”); and 

WHEREAS, Borrower has requested that Agent and the Lenders agree to amend and modify the Credit Agreement as provided herein, subject to
the terms and conditions contained herein. 
 NOW THEREFORE, in consideration of the premises and mutual agreements herein
contained, the parties hereto agree as follows: 
 1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to such terms in the Credit Agreement. 
 2. Amendments to Credit Agreement.
Subject to the satisfaction of the conditions set forth in Section 5 below and in reliance upon the representations and warranties of Borrower set forth in Section 6 below, the Credit Agreement is amended as follows:

 (a) Section 2.1(a) of the Credit Agreement is hereby amended by deleting the reference to “0.50% per annum”
contained therein and inserting “0.25% per annum” in lieu thereof. 
 (b) The fourth sentence of Section 8.6 of
the Credit Agreement is hereby amended and restated in its entirety as follows: 
 “The reasonable costs
and expenses incurred in obtaining any such inspections and/or appraisals shall in each case be borne by the Borrower (whether obtained by the Administrative Agent or the Borrower); provided that, unless a Default or Event of Default is then in
existence, the Borrower shall not be obligated to incur the charges, costs and expenses of more than one Inventory appraisal during each twelve month period and more than two complete audits and inspections during each twelve month period.”

 (c) Annex I of the Credit Agreement is hereby amended to add the following defined term in appropriate alphabetical order as
follows: 
 ““Third Amendment Effective Date” means December 7, 2012.” 

 (d) The defined term “Applicable Margin” set forth in Annex I of the Credit
Agreement is hereby amended and restated in its entirety as follows: 
 ““Applicable Margin”
means with respect to Loans, Reimbursement Obligations and letter of credit fees payable under Section 2.1 hereof with respect to Standby Letters of Credit and Commercial Letters of Credit, in each case until the first Pricing Date, the rates
per annum shown opposite Level II below, and thereafter from one Pricing Date to the next, the Applicable Margin means the rates per annum determined in accordance with the following schedule: 

 

											
	 Level
	  	 Fixed Charge Coverage Ratio
	  	Applicable
Margin for Base
Rate Loans and
Reimbursement
Obligations	 	Applicable
Margin for
Eurodollar Loans	 	Applicable
Margin for letter
of credit fees
with respect to
Standby Letters
of
Credit	 	Applicable
Margin for letter
of credit fees
with respect to
Commercial
Letters of
Credit
	 III
	  	Less than 1.20 to 1.0	  	0.75%	 	2.25%	 	2.25%	 	1.125%
	 II
	  	 Greater than or equal to 1.20 to 1.0
 but less than or equal to 1.75 to 1.0
	  	0.50%	 	2.00%	 	2.00%	 	1.000%
	 I
	  	Greater than 1.75 to 1.0	  	0.25%	 	1.75%	 	1.75%	 	0.875%

 For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of
the Borrower ending on or after December 31, 2010, the date on which the Administrative Agent is in receipt of the Borrower’s most recent financial statements (and, in the case of the year-end financial statements, audit report) for the
fiscal quarter then ended, pursuant to Section 8.5 hereof. The Applicable Margin shall be established based on the Fixed Charge Coverage Ratio measured as of the last day of each fiscal quarter, commencing with the fiscal quarter ending
December 31, 2010. The Applicable Margin established on a Pricing Date shall remain in effect until the next Pricing Date. If the Borrower has not delivered its financial statements by the date such financial statements (and, in the case of the
year-end financial statements, audit report) are required to be delivered under Section 8.5 hereof, until such financial statements and audit report are delivered, the Applicable Margin shall be the highest Applicable Margin (i.e.
Level III pricing shall apply). If the Borrower subsequently delivers such financial statements before the next Pricing Date, the Applicable Margin established by such late delivered financial statements shall take effect from the date of
delivery until the next Pricing Date. In all other circumstances, the Applicable Margin established by such financial statements shall be in effect from the Pricing Date that occurs immediately after the end of the fiscal quarter covered by such
financial statements until the next Pricing Date. Each determination of the Applicable Margin made by the Administrative Agent in accordance with the foregoing shall be conclusive and binding on the Borrower and the Lenders, subject to adjustment
for manifest error.” 

  
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 (e) Clause (c) of the defined term “Borrowing Base” set forth in Annex I of
the Credit Agreement is hereby amended and restated in its entirety as follows: 
 “(c) the least of
(i) the sum of 65% of the value, computed at the lower of cost or market using the first-in first-out method of Inventory valuation applied by the Borrower in accordance with GAAP, of Eligible In-Transit Inventory and (ii) the sum of 85%
of the Net Orderly Liquidation Value, based on the most recent appraisal, of Eligible In-Transit Inventory and (iii) $12,000,000; plus” 
 (f) Clause (d) of the defined term “Borrowing Base” set forth in Annex I of the Credit Agreement is hereby amended and restated in its entirety as follows: 

“(d) with respect to Letters of Credit issued for the purpose of purchasing Eligible In-Transit Inventory, the
lesser of (i) the sum of 65% of the value, computed at the lower of cost or market using the first-in first-out method of Inventory valuation applied by the Borrower in accordance with GAAP, of such underlying Eligible In-Transit Inventory and
(ii) the sum of 85% of the Net Orderly Liquidation Value, based on the most recent appraisal, of such underlying Eligible In-Transit Inventory (provided, that in no event shall the aggregate sum of clauses (c) and (d) of this
definition exceed $12,000,000); plus” 
 (g) Clause (f) of the defined term “Eligible Receivables” set forth
in Annex I of the Credit Agreement is hereby amended by deleting the reference to “$12,000,000” contained therein and inserting “$18,000,000” in lieu thereof. 

(h) Clause (q) of the defined term “Eligible Receivables” set forth in Annex I of the Credit Agreement is hereby amended
by deleting the reference to “26%, or such other limit as the Administrative Agent may agree to in its sole discretion; provided that such limit shall not exceed 30% without the consent of the Required Lenders” contained therein and
inserting “35%” in lieu thereof. 
 (i) The defined term “Insurance Overadvance” set forth in Annex I of the
Credit Agreement is hereby amended and restated in its entirety as follows: 
 ““Insurance
Overadvance” means any time the portion of the unpaid principal balance of the Revolving Loans predicated on the Insurance Availability that exceeds the sum of 75% of the aggregate cash surrender value of the Life Policies subject to Life
Insurance Assignments.” 
 (j) The defined term “Life Policies” set forth in Annex I of the Credit Agreement is
hereby amended and restated in its entirety as follows: 
 ““Life Policies” means collectively
(a) the Borrower’s life insurance policies maintained on the life of each of James Bode, Dennis Burke, Michael Smith, James Flaherty, Dan Schiff, Bruce Legris, John Pohl, Lucy Vallicelli, Bill Chamberlain and Sally Washlow, (b) any
other life insurance policy of the 

  
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Borrower maintained on the life of an officer of the Borrower and (c) and any life insurance policy maintained on the life of an officer of the Borrower held in trust acceptable to the
Administrative Agent in its sole discretion and subject to collateral assignment documentation in form and substance satisfactory to the Administrative Agent in its sole discretion.” 

(k) The last sentence of the defined term “Revolving Credit Commitment” set forth in Annex I of the Credit Agreement is hereby
amended and restated in its entirety as follows: 
 “Borrower and the Lenders acknowledge and agree that
the Revolving Credit Commitments of the Lenders aggregate $35,000,000 on the Third Amendment Effective Date.” 
 (l) The
defined term “Termination Date” set forth in Annex I of the Credit Agreement is hereby amended by deleting the reference to “July 16, 2013” contained therein and inserting “July 16, 2016” in lieu thereof. 

(m) Schedule 1 to the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit A hereto.

 3. Continuing Effect. Except as expressly set forth in Section 2 of this Amendment, nothing in this
Amendment shall constitute a modification or alteration of the terms, conditions or covenants of the Credit Agreement or any other Loan Document or a waiver of any other terms or provisions thereof, and the Credit Agreement and the other Loan
Documents shall remain unchanged and shall continue in full force and effect, in each case as amended hereby. 
 4.
Reaffirmation and Confirmation. Borrower hereby ratifies, affirms, acknowledges and agrees that the Credit Agreement and the other Loan Documents, in each case as amended hereby, represent the valid, enforceable and collectible obligations of
Borrower, and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Credit Agreement or any other Loan Document. Borrower hereby agrees that this Amendment in no
way acts as a release or relinquishment of the Liens and rights securing payments of its Obligations. The Liens and rights securing payment of its Obligations are hereby ratified and confirmed by Borrower in all respects. 

5. Conditions to Effectiveness. This Amendment shall become effective as of the date hereof and upon the satisfaction of the
following conditions precedent: 
 (a) Each party hereto shall have executed and delivered this Amendment to Agent; 

(b) Agent shall have received from Borrower for each Lender a duly executed Second Amended and Restated Revolving Note dated the date
hereof and each in form and substance satisfactory to Agent (the “Amended and Restated Notes”); 

  
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 (c) Agent shall have received a fully and manually executed Second Amendment to Real
Property Mortgage with respect to the real Property located at 6500 W. Cortland Avenue, Chicago, Illinois 60607, in form and substance satisfactory to Agent (the “Mortgage Amendment”); 

(d) Agent shall have received from Borrower a duly executed amendment to fee letter dated as of the date hereof in form and substance
satisfactory to Agent (the “Fee Letter Amendment”); 
 (e) Agent shall have received a copy of resolutions of
Borrower’s board of directors (or analogous governing board) authorizing the execution, delivery and performance of this Amendment, the Amended and Restated Notes, the Mortgage Amendment and the Fee Letter Amendment, in form and substance
satisfactory to Agent; 
 (f) Agent shall have received for each Lender the favorable written opinions of counsel to Borrower,
in form and substance satisfactory to Agent; 
 (g) Borrower shall have paid to Agent, for the pro rata benefit of the Lenders,
an amendment fee equal to $87,500; and 
 (h) No Default or Event of Default shall have occurred and be continuing on the date
hereof or as of the date of the effectiveness of this Amendment. 
 6. Representations and Warranties. In order to induce
Agent and the Lenders to enter into this Amendment, Borrower hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment: 
 (a) All representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date of this Amendment, in each case as if then made, other than
representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date); 

(b) No Default or Event of Default has occurred and is continuing; 

(c) This Amendment constitutes a legal, valid and binding obligation of Borrower and is enforceable against Borrower in accordance with
its respective terms. 
 7. Miscellaneous. 
 (a) Expenses. Borrower agrees to pay on demand all costs and expenses of Agent (including the reasonable fees and expenses of outside counsel for Agent) in connection with the preparation,
negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith. All obligations provided herein shall survive any
termination of this Amendment and the Credit Agreement as amended hereby. 

  
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 (b) Governing Law. This Amendment shall be a contract made under and governed by the
internal laws of the State of Illinois. 
 (c) Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same
Amendment. 
 8. Release. 
 (a) In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower, on behalf
of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and the Lenders, and their successors and assigns, and their present and former
shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the
“Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown,
suspected or unsuspected, both at law and in equity, which Borrower or any of its respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or
by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with any
of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto, other than to the extent of those Claims which arise from the gross negligence or willful misconduct of the applicable Releasee as determined
in a final, non-appealable judgment by a court of competent jurisdiction. 
 (b) Borrower understands, acknowledges and agrees
that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of
such release. 
 (c) Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or
which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above. 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized and delivered as of the date first above written. 
  

			
	 COBRA ELECTRONICS CORPORATION

		
	By:	 	 /s/ Robert J. Ben

	Name:	 	 Robert J. Ben

	Title:	 	 Senior VP and CFO

	
	BMO HARRIS BANK N.A., formerly known as Harris N.A., in its individual capacity as a Lender and as Agent
		
	By:	 	 /s/ William J. Kennedy

	Name:	 	 William J. Kennedy

	Title:	 	 Vice President

	
	FIFTH THIRD BANK, in its individual capacity as a Lender
		
	By:	 	 /s/ Robert Tanakatsubo

	Name:	 	 Robert Tanakatsubo

	Title:	 	 Officer

 EXHIBIT A 
 SCHEDULE 1 
 COMMITMENTS 

 

					
	 NAME OF LENDER
	  	REVOLVING CREDIT
COMMITMENT	 
	 BMO Harris Bank N.A., formerly known as Harris N.A.
	  	$	21,000,000	  
	 Fifth Third Bank
	  	$	14,000,000	  
		  	  
	  
	 
	 TOTAL
	  	$	35,000,000Form of Global Note due 2015

 Exhibit 4.1 
 (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. 
 0.800% Global Notes due 2015 

CUSIP NO. 00206R BL5 
 ISIN NO. US00206RBL50 
 No. R-1 

$500,000,000 

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 Five Hundred Million Dollars ($500,000,000) on
December 1, 2015 (the “Maturity Date”), and to pay interest on said principal sum from December 11, 2012 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears
on June 1 and December 1 in each year, commencing on June 1, 2013 (each an “Interest Payment Date”) and on the Maturity Date, at the interest rate of 0.800% 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 May 15 or November 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: December 11, 2012	 		 	AT&T INC.
				
	[SEAL]	 		 	By:	 	 
		 		 		 	John J. Stephens
		 		 		 	 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 0.800% Global Notes due 2015 
 of the series designated herein referred to

 in the within-mentioned Indenture. 

THE BANK OF NEW YORK MELLON, as Trustee 
  

					
			
	By:	 	 	 	                              
                                         
 Dated: December 11, 2012
		 	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 $2,000 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 10 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 upon direction by 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 after consultation with AT&T, 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 Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith 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. 

  
 2 

 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 in accordance with applicable procedures of DTC.

 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 

 (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 December 6, 2012, or (b) a taxing authority of the United States takes an action on or after December 6, 2012, 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 

  
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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 $2,000 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. 

  
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 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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