Document:

Exhibit

EXHIBIT 4.3

EXECUTION VERSION 

ALLEGIANT TRAVEL COMPANY,
as Issuer
and
THE SUBSIDIARY GUARANTORS PARTY HERETO, 
as Guarantors
__________________________
SECOND SUPPLEMENTAL INDENTURE
Dated as of December 5, 2016
__________________________
Wells Fargo Bank, National Association,
as Trustee

 

Second Supplemental Indenture dated as of December 5, 2016 (the “Second Supplemental Indenture”) among Allegiant Travel Company, a Nevada corporation (the “Company”), Teesnap, LLC, a Nevada limited liability company (the “Guaranteeing Subsidiary”), the Guarantors party to the Indenture (as defined below), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “Trustee”), to the Indenture, dated as of June 13, 2014, between the Company and the Trustee (the “Base Indenture”) as amended by the First Supplemental Indenture dated as of June 25, 2014 (the “First Supplemental Indenture”, and together with the Base Indenture and this Second Supplemental Indenture, the “Indenture”).  
WHEREAS, each of the Company and the Guarantors (as defined in the Base Indenture) has heretofore executed and delivered to the Trustee the Base Indenture and the First Supplemental Indenture, among the Company, the Guarantors, and the Trustee providing for the issuance of $300,000,000 5.50% Senior Notes due 2019 (the “Existing Notes”);
WHEREAS, pursuant to Section 2.2 and Section 9.1 of the Base Indenture and Section 3.12(a) of the First Supplemental Indenture, the Company, the Guarantors and the Trustee, as applicable, may amend or supplement the First Supplemental Indenture, the Subsidiary Guarantees or the Existing Notes without the consent of any Holder of an Existing Note to provide for the issuance of the New Notes and to add additional Guarantees;

WHEREAS, pursuant to Section 3.13 of the First Supplemental Indenture, the Company is authorized and may increase the principal amount of the Notes under this Indenture and issue such increased principal amount  (or any portion thereof) as new notes (the “New Notes”) which shall form a single series with the Existing Notes;
WHEREAS, pursuant to Section 4.7 of the First Supplemental Indenture the Company has notified the Trustee that the Guaranteeing Subsidiary shall become a Guarantor and execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally Guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture; 
WHEREAS, the Guaranteeing Subsidiary has duly authorized the execution and delivery of this Second Supplemental Indenture to provide its Note Guarantee in accordance with Section 7 of the First Supplemental Indenture and all things necessary to make this Second Supplemental Indenture and the Indenture a valid and binding agreement of the Guaranteeing Subsidiary, in accordance with the terms thereof, have been done;
WHEREAS, the Company has provided to the Trustee such documents as are required to be provided to it under Section 4.7 of the First Supplemental Indenture and Section 2.3, 9.7, and 10.4 of the Base Indenture, has requested the Trustee to join with it and the Guaranteeing Subsidiary in the execution and delivery of this Second Supplemental Indenture,  and pursuant to Section 3.12(a) of the First Supplemental Indenture, the Company, the Guaranteeing Subsidiary, the Guarantors and the Trustee are authorized to execute and deliver this Second Supplemental Indenture.
WHEREAS, all other actions necessary to make this Second Supplemental Indenture a legal, valid and binding agreement of the Company, the Guarantors and the Trustee, in accordance with its terms, and a supplement to, the Base Indenture and First Supplemental Indenture, have been performed;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the benefit of each other and the equal and ratable benefit of the Holders as follows:
1.Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2.New Notes. The following terms relating to the New Notes are hereby authorized and established:

 

		
	a.
	The aggregate principal amount of the New Notes that shall be issued,  authenticated and delivered under this Second Supplemental Indenture shall be $150,000,000.

		
	b.
	The New Notes shall be issued on December 5, 2016 (the “New Notes Issue Date”) at an issue price of 101.50% of the aggregate principal amount of the New Notes, plus accrued interest from July 15, 2016 to the New Notes Issue Date. The date from which interest shall accrue on the New Notes shall be July 15, 2016.

		
	c.
	The New Notes shall have the other terms set forth in the form of global note attached as Exhibit A to the First Supplemental Indenture and shall be issued as one Global Note in the form attached as Exhibit A to this Second Supplemental Indenture.

		
	d.
	The New Notes and guarantee issued pursuant to this Second Supplemental Indenture are issued pursuant to Section 3.13 of the First Supplemental Indenture, Section 9. 1 of the Base Indenture and Section 3.12(a) of the First Supplemental Indenture and shall be consolidated with and form a single series with the Existing Notes previously established pursuant to the First Supplemental Indenture.

3.Guarantor. The Guaranteeing Subsidiary hereby agrees to be a Guarantor under this Indenture and to be bound by the terms of the Indenture applicable to Guarantors, including Section 7 of the First Supplemental Indenture. 

4.Authentication of New Notes. The Trustee shall, pursuant to an authentication order and delivery to the Trustee such documents as are required to be provided to it under Section 2.3, 9.7, and 10.4 of the Base Indenture, authenticate the New Notes.

5.Existing Indenture in Full Force and Effect. Except as expressly provided herein, all of the terms, provisions and conditions of the Existing Indenture and the Notes shall remain in full force and effect. 

6.Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

7.Waiver of Jury Trial. EACH OF THE COMPANY, THE GUARANTORS, THE GUARANTEEING SUBSIDIARY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

8.Counterparts. The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.  The exchange of copies of this Second Supplemental Indenture and of signature pages by facsimile or portable document format (“PDF”) transmission shall constitute effective execution and delivery of this Second Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.  
6.    Headings. The headings of the Sections of this Second Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Second Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
7.    The Trustee.  The Trustee makes no representation as to and shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture, the New Notes, the Note Guarantee of the Guaranteeing Subsidiary or for or in respect of the recitals contained herein, 

 

all of which recitals are made solely by the Company, the Guarantors and the Guaranteeing Subsidiary. All of the provisions contained in the Indenture in respect of the rights, privileges, immunities, powers, and duties of the Trustee shall be applicable in respect of this Second Supplemental Indenture as fully and with like force and effect as though fully set forth in full herein. The Trustee shall not be accountable for the use or application by the Company of the New Notes or the proceeds thereof. The Company hereby confirms to the Trustee that this Second Supplemental Indenture has not resulted in a material modification of the Existing Notes for Foreign Accounting Tax Compliance Act (“FATCA”) purposes.

[SIGNATURE PAGES FOLLOW]

 

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, all as of the date first above written.

ALLEGIANT TRAVEL COMPANY
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

ALLEGIANT AIR, LLC
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

ALLEGIANT VACATIONS, LLC
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

SUNRISE ASSET MANAGEMENT, LLC
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

AFH, INC.
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, President

ALLEGIANT INFORMATION SYSTEMS, 
INC.
		
	By:
	/s/ Maurice J. Gallagher, Jr.     
Maurice J. Gallagher, Jr., President

G4 PROPERTIES, LLC
		
	By:
	/s/ Maurice J. Gallagher, Jr.     
Maurice J. Gallagher, Jr., CEO of Allegiant Travel Company, Sole Member

    

MR BRIGHTSIDE, LLC
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

TEESNAP, LLC, as Guaranteeing Subsidiary
		
	By:
	/s/ Scott Sheldon         
Scott Sheldon, Chief Financial Officer

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
		
	By:
	/s/ Maddy Hughes         
Maddy Hughes, Vice President

FORM OF NOTE
EXHIBIT A
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY]1 
[UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE 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 THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]2 

                                                                                        
1    To be inserted in each Global Note.
2    To be inserted in each Global Note registered in the name of DTC or its nominee.

CUSIP No.:  01748X AA0 
ISIN No.:  US01748XAA00
ALLEGIANT TRAVEL COMPANY
5.50% SENIOR NOTES DUE 2019
No. 2
ALLEGIANT TRAVEL COMPANY, a Nevada corporation (the “Company,” which term includes any successor entity), for value received promises to pay to Cede & Co. or registered assigns, the principal sum of $________ Dollars, or such other principal sum as shall be set forth in the Schedule of Increases and Decreases attached hereto on July 15, 2019.
Interest Payment Dates:  January 15 and July 15, beginning on January 15, 2017.
Record Dates:  January 1 and July 1.
Reference is made to the further provisions of this Note contained herein, which shall for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by one of its duly authorized officers.
ALLEGIANT TRAVEL COMPANY
		
	By:
	____________________________________ 
Name: 
Title:

Certificate of Authentication
This is one of the 5.50% Senior Notes due 2019 referred to in the within-mentioned Indenture.
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
		
	By:
	____________________________________ 
Authorized Signatory

Dated:  December __, 2016

    

(REVERSE OF SECURITY) 
5.50% SENIOR NOTES DUE 2019
(1)Interest.  Allegiant Travel Company, a Nevada corporation (the “Company”), shall pay interest on the outstanding principal amount of this Note at a rate per annum of 5.50% (calculated on the basis of a 360-day year of twelve 30-day months), payable semi-annually in arrears, on each Interest Payment Date until the principal thereof has been paid in full, commencing on January 15, 2017, to the Person in whose name this Note is registered at the close of business on the Record Date next preceding such Interest Payment Date.  Interest shall accrue on this Note from the most recent date to which interest on this Note has been paid or for which interest has been provided or, if no interest has been paid or provided for hereon, from July 15, 2016.
(2)    Terms of Payment.  Interest on the Notes which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name the Note is registered at the close of business on the Record Date next preceding such Interest Payment Date at the office or agency of the Company maintained for such purpose under the Indenture (as such term is defined below); provided, however, that each installment of interest on any Note may be paid at the Company’s option by mailing a check for such interest, payable to or upon the written order of the Person entitled thereto, to the address of such Person as it appears on the register for such Note or by wire transfer of immediately available funds to an account of the Person entitled thereto as such account shall be provided to the Registrar for such Notes and shall appear on the applicable register.  Payments of principal (and premium, if any) of a Note shall be made against surrender of such Note at the office or agency of the Company maintained for such purpose pursuant to the Indenture at the Company’s option by check payable to or upon the written order of the Person entitled thereto or by wire transfer to an account of the Person entitled thereto as such account shall be provided to the Registrar for such Notes.  All amounts payable by the Company with respect to the Notes shall be in U.S. dollars.
(3)    Registrar and Paying Agent.  Initially, Wells Fargo Bank, National Association, a national banking association, not in its individual capacity but solely as trustee (the “Trustee”), will act as Paying Agent and Registrar for the Notes.  The Company may remove any Paying Agent or Registrar without notice to the Holders.
(4)    Indenture.  The Company issued the Notes under the Indenture dated as of June 13, 2014 (the “Base Indenture”), between the Company and the Trustee, as supplemented by the First Supplemental Indenture, dated as of June 25, 2014 (the “First Supplemental Indenture”), as further supplemented by the Second Supplemental Indenture, dated as of December 5, 2016 (the “Second Supplemental Indenture”), among the Company, the Guarantors, and the Trustee (the Base Indenture, as supplemented by the First Supplemental Indenture and the Second Supplemental Indenture, the “Indenture”).  This Note is one of a duly authorized series of Notes of the Company designated as its 5.50% Senior Notes due 2019.  The Notes are limited in aggregate principal amount to $450,000,000. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein.  The terms of the Notes include those stated in the Indenture and made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the Indenture.  Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of them.  To the extent any provision of the Notes limits, qualifies or conflicts with another provision which is required to be included in the Indenture by the TIA or with the Indenture directly, the required TIA provision or Indenture provision, as applicable, shall control.  Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture, as the same may be amended from time to time.
(5)    Optional Redemption; Change of Control Repurchase.
(a)The Notes will be redeemable, at the Company’s option, in whole at any time or in part from time to time, pursuant to the terms of the Indenture at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such Notes (excluding accrued and unpaid interest to the redemption date) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to (but not including) such redemption date.

    

(b)    Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of the Notes pursuant to a Change of Control Offer at a purchase price of 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest on the Notes repurchased to (but not including) the date of purchase.
(6)    Denominations; Transfer; Exchange.  The Notes shall be issuable in denominations of $2,000 or an integral multiple of $1,000 in excess thereof.  Where Notes are presented to the Registrar with a request to register a transfer or to exchange them for an equal principal amount of Notes, the Registrar shall register the transfer of or make the exchange if its requirements for such transactions are met.  To permit registrations of transfers and exchanges, the Trustee shall authenticate the Notes at the Registrar’s request.  No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted in the Indenture), but the Company may require the payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than with respect to exchanges of temporary securities, securities redeemed in part, or to amend the terms of a Note).  Neither the Company nor the Registrar shall be required (a) to register the transfer of, or exchange of any Notes for the period beginning at the opening of business fifteen days immediately preceding the sending of a notice of redemption of any Notes selected for redemption and ending at the close of business on the day of such sending or (b) to register the transfer of or exchange of any Notes selected, called or being called for redemption as a whole or the portion being redeemed of any such Notes selected, called or being called for redemption in part.
(7)    Persons Deemed Owners.  The Person in whose name a Note is registered shall be treated as the owner of it for the purpose of receiving payment of principal of (and premium, if any) and interest, if any, on this Note and for all other purposes whatsoever.
(8)    Unclaimed Money.  Subject to applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of principal of, or premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust.  Thereafter, the Holder of such Note shall look only to the Company for payment thereof, and all liability of the Trustee and such Paying Agent with respect to such money, and all liability of the Company as trustee thereof, shall cease.
(9)    Satisfaction and Discharge Prior to Redemption or Stated Maturity.  Subject to certain conditions, the Company may terminate some or all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee as trust funds in cash or non‐callable Government Securities, or a combination thereof, in an amount sufficient to pay the principal of, and premium if any, and interest on the Notes to redemption or Stated Maturity.
(10)    Amendment; Supplement; Waiver.  Subject to certain exceptions, the provisions of the Indenture relating to the Notes may be amended or supplemented without notice to any Holder but with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding, and any existing Default relating to the Notes may be waived with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding.  Without notice to or consent of any Holder, the Company, the Guarantors and the Trustee may amend the Indenture as it applies to any Notes or any of the other terms of such Notes to, among other things, cure any ambiguity or correct or supplement any provision contained in the Indenture or in any Notes which may be defective or inconsistent with any other provision contained therein.
(11)    Defaults and Remedies.  If an Event of Default with respect to the Notes occurs and is continuing (other than an Event of Default described in clause (5) or (6) of the definition of “Event of Default” in Section 5(a) of the First Supplemental Indenture), the Trustee or the Holders of at least 25% in principal amount of Notes then outstanding, by written notice to the Company (and to the Trustee, if such notice is given by the Holders), may declare the principal amount of, and accrued and unpaid interest on, all the Notes to be due and payable.  Upon such a declaration, such amounts shall be due and payable immediately.  If an Event of Default described in clause (5) or (6) of the definition of “Event of Default” in Section 5(a) of the First Supplemental Indenture occurs, the principal amount of, and accrued and unpaid interest on, all the Notes shall ipso facto become and be immediately due and 

payable without any declaration or other act on the part of the Trustee or any Holder.  Holders of Notes may not enforce the Indenture or the Notes except as provided in the Indenture.  The Trustee is not obligated to exercise any of its rights or powers under the Indenture at the direction of Holders unless the Holders have offered security or indemnity satisfactory to the Trustee.  The Indenture permits, subject to certain limitations therein provided, Holders of a majority in principal amount of the Notes then outstanding to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Notes.  The Trustee may withhold from Holders of Notes notice of any continuing Default with respect to the Notes (except a Default in payment of principal, or premium if any, or accrued and unpaid interest with respect to the Notes) in accordance with the provisions of the Indenture if a committee of the Trustee’s Trust Officers in good faith determines that withholding notice is in the interest of the Holders.
(12)    Trustee Dealings With Company.  Subject to certain limitations provided in the Indenture, the Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
(13)    No Recourse Against Others.  A director, officer, employee or shareholder, as such, of the Company or of any Guarantor shall not have any liability for any obligations of the Company or the Guarantor under the Notes, any Note Guarantee or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees.
(14)    Authentication.  This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
(15)    Governing Law.  The Indenture and the Notes, including any claim or controversy arising out of or relating to the Indenture or the Notes, shall be governed by the laws of the State of New York, without regard to the conflicts of laws provisions thereof other than Section 5-1401 of the General Obligations Law.
(16)    Abbreviations and Defined Terms.  Customary abbreviations may be used in the name of a Holder of a Note or an assignee, such as:  TEN CON (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(17)    CUSIP Numbers.  The Company has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes.  No representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice to Holders.  Reliance may be placed only on the other elements of identification printed on the Notes, and any such Notes shall not be affected by any defect or omission of such CUSIP numbers.

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following increases or decreases to this Global Note have been made:
	
					
	Date
	Amount of Decrease in 
Principal Amount at Maturity 
of this Global Note
	Amount of Increase in 
Principal Amount at Maturity 
of this Global Note
	Principal Amount at Maturity 
of this Global Note 
Following such 
decrease (or increase)
	Signature of 
Authorized Signatory 
of Trustee or DTC 
Custodian

ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
 
(Print or type name, address and zip code and social security or tax ID number of assignee)
and irrevocably appoint, agent to transfer this Note on the books of the Company.  The agent may substitute another to act for him.
	
		
	Dated:  ____________________________
	Signed:  ___________________________________

	 
	(Sign exactly as name appears on the other 
side of this Note)

Signature 
Guarantee*:___________________________________
		
	*
	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

    

OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.1 of the First Supplemental Indenture, check the box below:
[  ]  Section 4.1
If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.1 of the First Supplemental Indenture, state the amount you elect to have purchased:
$_______________
Date:  ____________________
		
	Your Signature:
	_________________________________ 
(Sign exactly as your name appears on the face of this Note)

Tax Identification No.:  ____________________________
Signature Guarantee*:  ___________________________________
		
	*
	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).Exhibit

EXHIBIT 10.1

	
			
	

Notice of Inducement
Grant of Time-Based
Restricted Stock Units 
	 

	Brian E. Agle
Address
City, State, Zip
	Grant Number:
Employee ID:
	Grant Number
Avid Employee ID

This notice (the “Notice”) evidences the grant by Avid Technology, Inc. (the “Company”) on               (the “Grant Date”) to you (the “Grantee”) of            time-based restricted stock units of the Company (“RSUs”).  Each RSU represents the right to receive one share of common stock, $0.01 par value per share, of the Company (“Common Stock”) upon vesting.  The shares of Common Stock that are issuable upon vesting of the RSUs are referred to herein as the “Shares.”  The RSUs have been granted as an inducement award pursuant to and in accordance with NASDAQ Listing Rule 5635(c)(4).  Accordingly, the RSUs have been granted outside of the Company’s 2014 Stock Incentive Plan (the “Plan”) previously adopted by the Company and approved by the Company’s stockholders. However, the terms of the Plan are incorporated herein and shall apply to the RSUs as if issued under the Plan, subject to this Notice and the attached Terms and Conditions.  Together, the Notice, the attached Terms and Conditions and the terms of the Plan constitute the complete agreement between the Grantee and the Company regarding the RSUs and the Shares.

The RSUs will vest as follows:  One year from the Grant Date 33.33% of the RSUs shall vest and thereafter the RSUs shall vest in equal installments of 8.25% of the RSUs upon the conclusion of each three-month period, provided that the Grantee is employed by the Company on such vesting date.  

Except as otherwise expressly provided herein or in your employment agreement, if your employment with the Company terminates before your RSUs are fully vested, you will forfeit the unvested RSUs.

Acceleration.  Should (i) the Company terminate the Grantee’s employment with the Company without "Cause" or (ii) the Grantee terminate his employment with the Company with "Good Reason," in each case within one year following a Change-in-Control of the Company all RSUs will become immediately vested and payable in full.

For purposes of this Notice:

		
	•
	"Cause" means misconduct including, but not limited to: (1) conviction of any felony or any crime involving moral turpitude or dishonesty ; (2) participation in a fraud, embezzlement or act of dishonesty to the detriment of the Company; (3) material breach of any Company policy; (4) gross negligence or willful misconduct ; (5) material breach of any agreement between you and the Company (including your Non-Disclosure and Invention Assignment Agreement and the Company's Code of Business Conduct and Ethics (both of which you are required to sign as a condition of your employment at the Company)); (6) failure by you to substantially perform your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness); or (7) failing or refusing to cooperate, as reasonably requested in writing by the Company, in any internal or external investigation of any matter in which the Company has a material interest (financial or otherwise) in the outcome of the investigation.

		
	•
	“Good Reason” means a material diminution in your authority, duties or responsibilities; provided that “Good Reason” will exist only if (1) you inform the Company of the existence of the condition that you believe constitutes Good Reason within thirty (30) days after the condition first exists, (2)  the Company fails to remedy the condition within thirty (30) days after being notified, and (3) your employment terminates within 30 days after the end of the thirty-day cure period described in clause (2) (or by such earlier date as is requested by the Company).

		
	•
	“Change of Control” shall have the meaning set forth in Exhibit A.

By your signature and the Company’s signature below, you and the Company agree that the RSUs are granted and governed by this Notice, the terms and conditions of the Plan and the attached Terms and Conditions of the Shares (subject to any applicable, superseding terms of your employment agreement with the Company).

Avid Technology, Inc.

    
 By                        Date:                        

     [                                ]

I acknowledge the RSU grant made to me on__________, and confirm that I agree to the terms and conditions set forth herein.

Date:                           
Name of ELT Employee

Avid Technology, Inc.
Inducement Grant of Restricted Stock Units
Terms and Conditions
(Time Based Inducement Award)

1.Non-Plan Grant; Incorporation of Certain Terms and Conditions of the Plan.  Avid Technology, Inc. has granted to the Grantee, subject to these Terms and Conditions, the attached Notice and the terms and conditions of the Plan (as incorporated herein), the number of RSUs identified in the Notice.  Each RSU represents the right to receive one share of Common Stock.  The RSUs are granted as a stand-alone award separate and apart from, and outside of, the Plan and shall not constitute an award granted under or pursuant to the Plan.  However, except as otherwise expressly stated herein, the RSUs shall be governed by terms and conditions identical to those of the Plan, which are incorporated herein by reference, and shall be interpreted in accordance with the Plan.  In the event of any conflict between the terms and conditions of the Notice and these Terms and Conditions, on the one hand, and the terms and conditions of the Plan, on the other, the Notice and these Terms and Conditions shall govern. Notwithstanding any other provision of the Notice to the contrary, the RSUs are granted either by a majority of the Company’s independent directors or by the independent compensation committee of the Company’s board of directors within the meaning of NASDAQ Listing Rule 5605(a)(2). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed in the Notice and in the Plan, a copy of which has been provided to the Grantee.
2.    Employment Inducement Grant. The Company’s grant of RSUs to Grantee are intended to constitute an “employment inducement grant” under NASDAQ Listing Rule 5635(c)(4), and consequently is intended to be exempt from the NASDAQ rules regarding shareholder approval of stock purchase plans. The Notice and these Terms and Conditions shall be interpreted in accordance with and consistent with such exemption. 

3.    Vesting; Forfeiture.
(a)Vesting Schedule. The RSUs shall vest in accordance with the schedule, subject to any other conditions, as set forth in the Notice  

(b)Vesting Upon Termination of Relationship with Company.
(i) Generally.  Except as provided in Section 2(b)(ii) through (iv), if the Grantee ceases to be employed by Avid Technology, Inc.  or its subsidiaries (the “Company”) (as an employee or officer of, or an advisor or consultant to, the Company or its subsidiaries) for any reason or no reason, with or without Cause (as defined below), prior to the final vesting date of the RSUs, vesting shall cease and the Grantee will have no rights with respect to any RSUs that have not then vested.
(ii) Terms of Employment Agreement.  The RSUs shall be subject to (and modified by) any applicable, superseding vesting terms as set forth in the Grantee’s then-effective employment agreement, offer letter or other similar agreement with the Company, if any. 
(iii) Vesting Upon Death or Disability.  If the Grantee’s employment with the Company is terminated by reason of death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)) prior to the final vesting date of the RSUs, the Grantee’s RSUs shall immediately vest with respect to an additional number of RSUs that would have vested during the one-year period following the termination of the Grantee’s employment with the Company.
(iv) Reorganization Event.  Following a change in control of the Company or other Reorganization Event (as defined in the Plan), vesting of your RSUs may be modified by the Company’s Board of Directors or its designee, to the extent permitted under the terms of the Plan.
(c)  For purposes of these Terms and Conditions, employment with the Company shall include employment with any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) and 424(f) of the Code. 

4.    Distribution of Shares.  The Company shall not be obligated to issue to the Grantee any Shares upon the vesting of any RSU (or otherwise) unless the issuance and delivery of such Shares shall comply with all relevant provisions of law and other legal requirements including, without limitation, any applicable federal or state securities and tax laws and the 

requirements of any stock exchange upon which the Shares may then be listed.  Each Share distribution date is hereinafter referred to as a “Settlement Date.”
5.    Restrictions on Transfer.  The Grantee shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, “transfer”) any RSUs, or any interest therein, except by will or the laws of descent and distribution.  
6.    Dividend and Other Shareholder Rights.  Except as set forth in the terms of the Plan, neither the Grantee nor any person claiming under or through the Grantee shall be, or have any rights or privileges of, a stockholder of the Company in respect of the Shares issuable pursuant to the RSUs granted hereunder until the Shares have been delivered to the Grantee.
7.    Withholding Taxes; No Section 83(b) Election.
(a)No Shares will be delivered pursuant to the vesting of an RSU unless and until the Grantee satisfies any federal, state or local withholding tax obligation required by law to be withheld or paid in respect of this award.  The Grantee acknowledges and agrees that to satisfy any tax obligation described in Section 6(a) of these Terms and Conditions, the Company shall deduct and retain from the Shares to be distributed upon the Settlement Date such number of Shares as is equal in value to the Company’s minimum statutory withholding obligations with respect to the income recognized by the Grantee upon the lapse of the forfeiture provisions (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such income), based on the closing price of the Common Stock on the Settlement Date.

(b)The Grantee acknowledges that no election under Section 83(b) of the Code may be filed with respect to this award.

8.    Section 409A of the Code.  
(c)(a)    These Terms and Conditions and the applicable Notice shall be interpreted consistent with the intent that the award comply with, or be exempt from, the requirements of Section 409A of the Code, applicable Treasury regulations, and guidance thereunder ("Section 409A").  No provision of these Terms and Conditions or the Notice shall be interpreted or construed to transfer any liability for any tax (including a tax or penalty due as a result of a failure to comply with Section 409A) from the Grantee to the Company or to any other individual or entity.

(d)If the Grantee is a “specified employee” under Section 409A(a)(2)(B)(i) of the Code as of his separation from service (within the meaning of Section 409A) with the Company, any amount that is subject to Section 409A and payable upon the Grantee’s separation from service shall be delayed to the extent required by Section 409A(a)(2)(B)(i) until the earlier of (a) the first payroll date that is six (6) months after the Grantee’s separation from service or (b) a date determined by the Company that is within 30 days of the Grantee’s death.  Such six-month delay shall not be required for any payment that is exempt from the requirements of Section 409A.  

(e)For purposes of Section 409A, each installment payment under this award shall be treated as a separate payment.

(d)    Issuance of shares with respect to the RSUs shall occur no later than the deadline for short-term deferrals under Section 409A. 

9.    Miscellaneous.
(f)Governing Law.  These Terms and Conditions shall be governed by and construed in accordance with the laws of the State of Delaware without regard to any choice or conflict of law provision.

(g)Severability.  The invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of any other provision hereof, and each such other provision shall be severable and enforceable to the extent permitted by law.   

(h)Binding Effect.  These Terms and Conditions shall be binding upon and inure to the benefit of the Company and the Grantee and their respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 4. 

(i)Waiver.  Any provision for the benefit of the Company contained in these Terms and Conditions may be waived, either generally or in any particular instance, by the Board of Directors of the Company or a duly authorized committee thereof.

(j)Entire Agreement.  These Terms and Conditions, the Notice, the terms of the Plan and any applicable, superseding terms of the Grantee’s employment agreement constitute the entire agreement between the parties, and supersede all prior agreements and understandings, relating to the subject matter hereof.

(k)Amendment.  These Terms and Conditions may only be amended or modified in accordance with the terms of the Plan.

Exhibit A

"Change-in-Control of the Company" shall be deemed to have occurred only if any of the following events occur:

		
	(i)
	The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act”)) (a "Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated  under the Exchange Act) of 30% or more of either (a) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock”) or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities”); provided , however, that for purposes of this section, the following acquisitions shall not constitute a Change-in-Control:   (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction which satisfies the criteria set forth in clauses (a) and (b) of paragraph (iii) below; or

		
	(ii)
	Individuals who, as of the date of the Grant Date (the "Effective Date”), constitute the Company's Board of Directors (the "Incumbent Board”) cease for any reason to constitute at least a majority of the Company's Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

		
	(iii)
	Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the operating assets of the Company (a "Business Combination”), in each case, unless, following such Business Combination, (a) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 40% of, respectively, the then-outstanding shares of common stock (or other equity interests, in the case of an entity other than a corporation), and the combined voting power of the then-outstanding voting securities of the corporation or other entity resulting from such Business Combination (which as used in this section shall include, without limitation, a corporation or other entity which as a result of such transaction owns all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, and (b) no Person (excluding any corporation or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock (or other equity interests, in the case of an entity other than a corporation) of the corporation or other entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation or other entity;  provided, however, that a "Change-in-Control of the Company" shall be deemed to occur only if any of the foregoing events occur and such event that occurs is a "change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation" as defined in Treasury Reg. § 1.409A-3(i)(5).

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