Document:

PROMISSORY
NOTE

 

	Date
    of Note:	April
    28, 2017
	 	 
	Amount
    of Note:	EIGHT
    MILLION AND NO/100 DOLLARS ($8,000,000.00)
	 	 
	Maturity
    Date:	April
    28, 2022

 

CODA
OCTOPUS GROUP, INC., a Delaware corporation, CODA OCTOPUS PRODUCTS, INC., a Delaware corporation, and CODA OCTOPUS COLMEK, INC.,
a Utah Corporation (individually and/or collectively, the “Borrower, do hereby covenant and promise to pay to the order
of HSBC BANK USA, N.A., its successors and/or assigns (the “Lender”), at 2929 Walden Avenue, C-111, Depew, New York
14043, or at such other place as Lender may designate to Borrower in writing from time to time, in legal tender of the United
States, up to EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00), pursuant to the terms and conditions of that certain Loan Agreement
dated as of even date herewith between Borrower and Lender (as the same may be amended or modified from time to time, the “Loan
Agreement”), together with all accrued interest, which shall be due and payable upon the following terms and conditions
contained in this Promissory Note (this “Note”) and the Loan Agreement. 

 

	A.	Interest
    Rate.

 

(a) Interest
shall accrue under this Note at a rate of interest per annum equal to 4.5566 (the “Interest Rate”).

 

(b) Interest
shall be calculated at the rate of Actual/360 of the annual rate of interest for each day that principal is outstanding (i.e.,
interest will accrue and be paid on the actual number of calendar days elapsed from the date hereof and based on a 360-day year).

 

This
Note shall continue in full force and effect until all obligations and liabilities evidenced by this Note are paid in full. Nothing
contained in this Note or otherwise is intended, nor shall constitute, an obligation of the Lender to make any loan or advance.

 

	B.	Payment
    Terms:

 

Commencing
on May 28, 2017 and continuing on the twenty-eighth (28th) day of each month thereafter, Borrower shall make monthly payments
of principal and interest in an amount equal to $149,350.14, until April 28, 2022 (the “Maturity Date”). In addition,
within thirty (30) days after the delivery to Lender of the financial statements required under Section 6(a) of the Loan Agreement,
Borrower shall make an annual principal payment under the Loan in an amount equal to $700,000 each during the term of the Loan.
Unless this Note is otherwise accelerated in accordance with the terms and conditions hereof, the entire outstanding principal
balance of this Note plus all accrued interest shall be due and payable in full on the Maturity Date. 

 

If
any payment under this Note shall become due on a day other than a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing interest in connection with such payment. The Borrower
hereby authorizes the Lender to charge the Borrower’s deposit account at the Lender for any payment when due. “Business
Day” shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required
by law to be closed for business in New York, New York or in Miami, Florida.

 

    	 	 	 

    	 	 	 

    

 

	C.
    	Prepayment:

 

Borrower
may prepay the Note in whole or in part at any time during the term of the Note without penalty or premium, except as set forth
below; provided, however, Borrower acknowledges that such prepayment may result in Lender incurring additional costs, expenses
and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower,
therefore, agrees to pay all of Lender’s out-of-pocket costs associated with such prepayment, including, but not limited
to, outside counsel reasonable attorneys’ fees, any swap transaction breakage fees or termination fees and any other yield
maintenance fees of Lender.

 

Borrower
may prepay this Note in whole or in part at any time during the term of this Note upon sixty (60) days’ prior written notice
to the Lender. Prepayment in part or in full of the principal amount, whether made voluntarily by Borrower or by reason of Lender’s
exercise of its rights, upon Borrower’s default, to accelerate the unpaid principal amount (irrespective of whether or not
foreclosure proceedings have been commenced), will be accompanied by the following:

 

(a)
The Borrower will pay Lender, on the same date the prepayment is made, a break funding charge to cover loss, cost and expense
attributable to such an event. Such loss, cost or expense to the Lender shall be deemed to include, but not be limited to an amount
determined by the Lender as follows:

 

(i)
Calculate the Lender’s remaining interest cost based on (a) the most current Lender funding rate assigned upon origination,
last repricing date or last prepayment date, times (b) the principal amount of the prepayment amortized accordingly times (c)
the remaining period of time until the earlier of this Note’s expiration or next repricing date, dayweighted accordingly.

 

Notwithstanding
the foregoing, the Borrower’s annual principal payments of $700,000 required in accordance with the terms of Section B above
and Section 6(a) of the Loan Agreement shall not be subject to any prepayment penalty or premium as contemplated under this Section
C.

 

	D.	Security:

 

This
Note is secured, in part, by the collateral granted under (i) that certain Security Agreement dated as of even date herewith from
CODA OCTOPUS GROUP, INC. in favor of Lender (as the same may be amended or modified from time to time, the “Coda Octopus
Group Security Agreement”), (ii) that certain Security Agreement dated as of even date herewith from CODA OCTOPUS PRODUCTS,
INC. in favor of Lender (as the same may be amended or modified from time to time, the “Coda Octopus Products Security Agreement”),
(iii) that certain Security Agreement dated as of even date herewith from CODA OCTOPUS COLMEK, INC. in favor of Lender (as the
same may be amended or modified from time to time, the “Coda Octopus Colmek Security Agreement”; and together with
the Coda Octopus Group Security Agreement and the Coda Octopus Products Security Agreement, individually and/or collectively,
the “Security Agreement”), and (iv) all other security instruments executed in connection therewith.

 

	E.	Loan
    Documents:

 

This
Note, the Loan Agreement, the Security Agreement and all other documents and instruments executed in connection with this Note
are hereinafter individually and/or collectively referred to as the “Loan Documents”.

 

    	 	Page 2	 

    	 	 	 

    

 

	F.
    	Default
    Interest Rate:

 

If
Borrower fails to make timely payment of any amounts due hereunder, Lender, at its option, may, if permitted under applicable
law, increase the interest rate on this Note by adding four percent (4%) per annum (the “Default Rate”). However,
in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

 

	G.
    	Late
    Charges:

 

Lender
may collect a late charge not to exceed an amount equal to five percent (5%) of any installment which is not paid within ten (10)
days of the due date thereof, to cover the extra expense involved in handling delinquent payments, provided that collection of
said late charge shall not be deemed a waiver by Lender of any of its rights under this Note. Notwithstanding the foregoing, there
shall be no grace period or late charges for payments due on the outstanding principal balance due on the Maturity Date or upon
acceleration, as set forth in Section H below, but such outstanding balance shall accrue interest at the Default Rate.

 

	H.	Default
    and Acceleration:

 

If
any of the “Events of Default” (as defined in the Loan Agreement) occur and are not cured within any applicable cure
period set forth in the Loan Agreement, at the Lender’s option, exercisable in its sole discretion, all sums of principal
and interest under this Note shall be accelerated and become immediately due and payable without notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, except
as specifically provided in the Loan Agreement.

 

All
persons now or at any time liable for payment of this Note hereby waive presentment, protest, notice of protest and dishonor.
The Borrower expressly consents to any extension or renewal, in whole or in part, and all delays in time of payment or other performance
which Lender may grant at any time and from time to time without limitation and without any notice or further consent of the undersigned.

 

The
remedies of Lender as provided herein, or in the Security Agreement, the Mortgage, the Loan Agreement or the other Loan Documents
shall be cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of Lender,
and may be exercised as often as the occasion therefor shall arise.

 

The
Lender may, in the sole discretion of Lender, accept payments made by Borrower after any default has occurred, without waiving
any of Lender’s rights herein.

 

	I.
    	Costs:

 

In
the event that this Note is collected by law or through attorneys at law, or under advice therefrom (whether such attorneys are
employees of Lender or an affiliate of Lender or are outside counsel), Borrower and any endorser, guarantor or other person primarily
or secondarily liable for payment hereof hereby, severally and jointly agree to pay all costs of collection, including reasonable
attorneys’ fees including reasonable charges for paralegals, appraisers, experts and consultants working under the direction
or supervision of Lender’s attorneys, whether or not suit is brought, and whether incurred in connection with collection,
trial, appeal, bankruptcy or other creditors’ proceedings or otherwise.

 

    	 	Page 3	 

    	 	 	 

    

 

	J.	Loan
    Charges:

 

Nothing
herein contained, nor any transaction related thereto, shall be construed or so operate as to require Borrower or any person liable
for the repayment of same, to pay interest in an amount or at a rate greater than the maximum allowed by applicable law. Should
any interest or other charges paid by Borrower, or any parties liable for the payment of the Loan made pursuant to this Note,
result in the computation or earning of interest in excess of the maximum legal rate of interest permitted under the law in effect
while said interest is being earned, then any and all of such excess shall be and is waived by Lender, and all such excess shall
be automatically credited against and in reduction of the principal balance, and any portion of the excess that exceeds the principal
balance shall be paid by Lender to Borrower or any parties liable for the payment of the Loan made pursuant to this Note so that
under no circumstances shall the Borrower, or any parties liable for the payment of the Loan hereunder, be required to pay interest
in excess of the maximum rate allowed by applicable law.

 

	K.	Jurisdiction:

 

The
laws of the State of Florida shall govern the interpretation and enforcement of this Note. In the event that legal action is instituted
to collect any amounts due under, or to enforce any provision of, this instrument, Borrower and any endorser, guarantor or other
person primarily or secondarily liable for payment hereof consent to, and by execution hereof submit themselves to, the jurisdiction
of the courts of the State of Florida, and, notwithstanding the place of residence of any of them or the place of execution of
this instrument, such litigation may be brought in or transferred to a court of competent jurisdiction in and for Broward County,
Florida.

 

IN
ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE, BORROWER AND EACH ENDORSER WAIVE (I) THE RIGHT TO INTERPOSE
ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, (II) ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE AND (III)
ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.

 

The
Borrower and each endorser and guarantor of this Note each irrevocably submits to the nonexclusive jurisdiction of any Federal
or state court sitting in Florida, over any suit, action or proceeding arising out of or relating to this Note. Each of the Borrower
and each endorser and guarantor irrevocably waives to the fullest extent it may effectively do under applicable law, any objection
it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any
claim that the same has been brought in an inconvenient forum. Each of the Borrower and each endorser and guarantor hereby consents
to any and all process which may be served in any such suit, action or proceeding (i) by mailing a copy thereof by registered
and certified mail, postage prepaid, return receipt requested, to the Borrower’s, endorser’s or guarantor’s
address shown below or as notified to the Lender and (ii) by serving the same upon the Borrower(s), endorser(s) or guarantor(s)
in any other manner otherwise permitted by law, and agrees that such service shall in every respect be deemed effective service
upon the Borrower or such endorser or guarantor.

 

	L.	Miscellaneous:

 

	 	1.	TIME
    IS OF THE ESSENCE OF THIS NOTE.
	 	 	 
	 	2.	It
    is agreed that the granting to Borrower or any other party of an extension or extensions of time for the payment of any sum
    or sums due under this Note or under the Loan Agreement or the Security Agreement or for the performance of any covenant or
    stipulation thereof or the taking of other or additional security shall not in any way release or affect the liability of
    Borrower under this Note or any of the Loan Documents.

 

    	 	Page 4	 

    	 	 	 

    

 

	 	3.	This
    Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver,
    change, modification or discharge is sought.
	 	 	 
	 	4.	All
    parties to this Note, whether Borrower, principal, surety, guarantor or endorser, hereby waive presentment for payment, demand,
    notice, protest, notice of protest and notice of dishonor.
	 	 	 
	 	5.	Anything
    herein to the contrary notwithstanding, the obligations of Borrower under this Note shall be subject to the limitation that
    payments of interest shall not be required to the extent that receipt of any such payment by Lender would be contrary to provisions
    of law applicable to Lender limiting the maximum rate of interest which may be charged or collected by Lender.
	 	 	 
	 	6.	Borrower
    acknowledges that Lender shall have no obligation whatsoever to renew, modify or extend this Note or to refinance the indebtedness
    under this Note upon the maturity thereof, except as specifically provided herein.
	 	 	 
	 	7.	Lender
    shall have the right to accept and apply to the outstanding balance of this Note any and all payments or partial payments
    received from Borrower after the due date therefor, whether this Note has been accelerated or not, without waiver of any of
    Lender’s rights to continue to enforce the terms of this Note and to seek any and all remedies provided for herein or
    in any instrument securing the same, including, but not limited to, the right to foreclose on such security.
	 	 	 
	 	8.	The
    term “Borrower” as used herein, in every instance shall include the makers of this Note, and its heirs, executors,
    administrators, successors, legal representatives and assigns, and shall denote the singular and/or plural, the masculine
    and/or feminine, and natural and/or artificial persons whenever and wherever the context so requires or admits.
	 	 	 
	 	9.	If
    more than one party executes this Note, all such parties shall be jointly and severally liable for the payment of this Note.

 

	M.	Waiver
    of Jury Trial:

 

BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR LENDER TO EXTEND TO BORROWER THE LOAN EVIDENCED BY THIS NOTE.

 

[CONTINUED
ON FOLLOWING PAGE]

 

    	 	Page 5	 

    	 	 	 

    

 

Borrower
has duly executed this Note effective as of the date set forth hereinabove.

 

	 	BORROWER:
	 	 	 
	 	CODA OCTOPUS GROUP, INC., a Delaware corporation
	 	 	 
	 	By:	/s/
	 	 	Mike
    Midgley, Acting Chief Financial Officer
	 	 	 
	 	CODA OCTOPUS PRODUCTS, INC., a Delaware corporation
	 	 	 
	 	By:	/s/
	 	 	Mike
    Midgley, Acting Chief Financial Officer
	 	 	 
	 	CODA OCTOPUS COLMEK, INC., a Utah corporation
	 	 	 
	 	By:	/s/
	 	 	Mike
                                         Midgley, Chief Executive Officer

 

    	 	Page 6	 

    	 	 	 

    

 

	STATE
    OF FLORIDA	)	 
	 	)
    SS:	 
	COUNTY
    OF _____________	)	 

 

The
foregoing instrument was acknowledged before me this ____ day of April, 2017, by Mike Midgley, as Acting Chief Financial Officer
of CODA OCTOPUS GROUP, INC., a Delaware corporation, on behalf of the corporation, who is personally known to me or who has produced
a _______________________ identification, and who did take an oath.

 

	 	___________________________________________	 
	 	Print
    or Stamp Name: _________________________	 
	 	Notary
    Public, State of Florida	 
	 	Commission
    No.:_____________________________	 
	 	My
    Commission Expires:_______________________	 

 

	STATE
    OF FLORIDA	)	 
	 	)
    SS:	 
	COUNTY
    OF _____________	)	 

 

The
foregoing instrument was acknowledged before me this ____ day of April, 2017, by Mike Midgley, as Acting Chief Financial Officer
of CODA OCTOPUS PRODUCTS, INC., a Delaware corporation, on behalf of the corporation, who is personally known to me or who has
produced a _______________________ identification, and who did take an oath.

 

	 	___________________________________________	 
	 	Print
    or Stamp Name: _________________________	 
	 	Notary
    Public, State of Florida	 
	 	Commission
    No.:_____________________________	 
	 	My
    Commission Expires:_______________________	 

 

	STATE
    OF FLORIDA	)	 
	 	)
    SS:	 
	COUNTY
    OF _____________	)	 

 

The
foregoing instrument was acknowledged before me this ____ day of April, 2017, by Mike Midgley, as Chief Executive Officer of CODA
OCTOPUS COLMEK, INC., a Utah corporation, on behalf of the corporation, who is personally known to me or who has produced a _______________________
identification, and who did take an oath.

 

	 	___________________________________________	 
	 	Print
    or Stamp Name: _________________________	 
	 	Notary
    Public, State of Florida	 
	 	Commission
    No.:_____________________________	 
	 	My
    Commission Expires:_______________________	 

 

    	 	Page 7Exhibit

EXHBIT 10.1

    
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 27th day of March, 2017 by and between M. PONDER HARRISON (hereinafter “Executive”), whose address is 740 Arden Close NW, Atlanta, Georgia 30327, and ALLEGIANT TRAVEL COMPANY, a Nevada corporation (hereinafter “the Company”), whose address is 1201 N. Town Center Drive, Las Vegas, Nevada 89144.

W I T N E S S E T H 

WHEREAS, the Company desires to employ Executive  as its executive vice president- chief marketing officer and Executive  desires to be so employed pursuant to and in accordance with the terms and conditions hereinafter set forth; and 
NOW, THEREFORE, for and in consideration of the above premises, the terms and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by Executive and the Company, it is hereby agreed as follows:
1.Employment.  The Company hereby employs Executive and Executive hereby accepts employment by the Company upon all of the terms and conditions as are hereinafter set forth.  Terms of employment with the Company are also governed by the Company’s employment policies in effect from time to time.  The Company shall provide a copy of such employment policies to Executive upon request.  In the event of any conflict between the terms of this Agreement and the generally applicable employment policies, the terms of this Agreement shall prevail.

2.Scope of Services.
A.Executive shall be employed by the Company as the executive vice president-chief marketing officer of the Company.  Executive shall report to the Company’s President (“President”) and Board of Directors (“Board”).  Executive’s duties shall include those indicated above and such other duties assigned to him by the President or the Board from time to time.  
Executive’s services are mutually agreed to be unique personal services.  Executive acknowledges that the Company is relying upon Executive’s experience, expertise and other qualifications in entering into this Agreement.  Executive shall not assign or delegate any right, obligation or duty hereunder to any other person or entity without the express written consent of the Company.
B.During Executive’s period of service hereunder, Executive agrees to perform such services not inconsistent with Executive’s position as shall from time to time be assigned to Executive by the Company’s President or Board.  During the term of this Agreement, except for disability, illness and vacation periods, Executive shall devote Executive’s full productive time, attention and energies to the position of executive vice president-chief marketing officer of the Company and its operating subsidiaries.
C.Executive shall be required to reside in Las Vegas, Nevada during his employment under this Agreement.
D.Executive’s expenditure of reasonable amounts of time in connection with outside activities, not competitive with the business of the Company, such as outside directorships or charitable activities, shall not be considered in contravention of this Agreement so long as such activities do not interfere with his performance of this Agreement.  Further, it is understood and agreed by the parties hereto that Executive is entitled to engage in passive and personal investment activities not interfering with his performance of this Agreement.
3.Limitations of Duties.  Executive shall not, without consent first being given by the Company, which consent may be general authority from the Company:
A.Take part in activities detrimental to the best interests of the Company, including rendering any services to any other firm or entity which conflict or interfere with the performance of Executive’s duties hereunder.
B.Exceed any limitations on his authority that may be established by the Board.
C.Enter into any contract, oral or written, in the name of, for or on behalf of the Company other than in the ordinary course of business.
D.Use any money belonging to the Company or pledge its credit other than in the ordinary course of business.
E.Commit or suffer to be committed any act whereby the Company’s property may be subject to attachment or seizure.
F.Cause the Company to become a guarantor, surety or endorser or give any note for the benefit of any other person whomsoever.
Upon a breach of any provision under this Item 3, the Company shall have the right to terminate this Agreement for cause as set forth in Item 6E hereof and to pursue any other remedies available to the Company as a result of such breach.

Executive shall indemnify and hold the Company harmless from and against any and all damages, actions, causes of action, claims and other liabilities, contingent or otherwise, directed toward the Company by others as a result of Executive’s violation of any of the provisions of this Item 3.
4.Compensation.  
A.Equity Grants.  Upon the effective date of this Agreement, Employee will be granted 48,000 shares of restricted stock (the “Restricted Stock”) under the Company’s 2016 Long-Term Incentive Plan.  
B.Restricted Stock.  The Restricted Stock will be subject to the terms of a Restricted Stock Agreement to be entered into between the Company and Executive to evidence this grant.  The Restricted Stock will vest in six (6) equal semi-annual installments commencing on the date that is six (6) months after the date of grant.  Unvested Restricted Stock will be subject to accelerated pro-rata vesting to the extent provided in this Agreement.  Executive shall be entitled to vote all vested and unvested shares of Restricted Stock and to receive all dividends paid thereon, until and unless such time as such shares of Restricted Stock are forfeited in accordance with the terms of the Restricted Stock Agreement evidencing such grant.
C.No Base Compensation.  The equity grants described above are intended to be the sole compensation payable to Executive under this Agreement.  As such, Executive shall not be entitled to any base salary.
D.No Participation in Annual Bonus Plan.  The equity grants described above are intended to be the sole compensation payable to Executive under this Agreement.  As such, Executive shall not be entitled to participation in the Company’s annual bonus plan.  However, Executive may be granted a discretionary cash bonus for extraordinary performance in such amount as may be determined by the Board in its sole discretion.
E.Participation in Future Equity Grants.  It is not anticipated that Executive will participate in annual equity grants to the Company’s senior officers, but in the event of extra- ordinary performance, the Board may, in its sole discretion, choose to provide an equity grant to Executive in such amount as the Board may determine.
F.Fringe Benefits. The Company shall provide Executive health and dental insurance for Executive and his wife at the Company’s cost and such vacation time, sick leave and other fringe benefits, including but not limited to participation in any pension, 401(k) and employee benefit plans that may be maintained by the Company from time to time as are made generally available to other management employees of the Company in accordance with Company policies.  The Company reserves the right to change the benefits available under its benefit plans at any time or times.
G.Positive Space Travel.  Executive shall be entitled to passes for air travel on the flights of the Company (and any successor-in-interest to the Company) for Executive and his spouse on a positive space basis at no cost to Executive.  
H.Expense Reimbursement.  In addition, the Company shall reimburse Executive for any expenses incurred by Executive in connection with the business of the Company, as approved by the Company.  These expenses may include expenses for travel, business promotion, association memberships, and any other expenses as may be approved by the President or Board from time to time.  The Company shall reimburse Executive for such out-of-pocket expenses by the tenth (10th) day of the month following the month in which such expenses were incurred (and appropriate documentation thereof has been provided to the Company).   The Company may issue to Executive a company credit card.  In such event, Executive agrees to use such card only for the expenses reimbursable under this paragraph.  Executive agrees to keep the card securely.  In the event of loss or theft, the issuing authority and the Company shall be informed immediately.  The card shall be returned to the Company forthwith on the termination of Executive’s employment for any reason whatsoever.
I.Payroll Taxes.  Executive shall bear full responsibility for the employee portion of all payroll taxes.  Such amounts may be paid, at Executive’s request, by the cancellation of such number of shares of Restricted Stock upon vesting as may be necessary to fund the payroll tax obligation based on a value equal to the closing stock price of the Company’s stock on the last trading day prior to the date of vesting.
J.Deductions.  If any cash compensation is paid to Executive hereunder, then deductions shall be made from Executive’s salary for social security, Medicare, federal and state withholding taxes, and any other such taxes as may from time to time be required by governmental authority.  
K.The compensation provided for Executive hereunder is inclusive of any fees received by Executive as an officer of the Company or any other company or corporate body in which Executive holds an office as a nominee or representative of the Company.  Any such amounts received by Executive shall be paid over to the Company.
L.Clawback Agreement.  In accordance with the Company’s clawback policy, Executive hereby agrees to reimburse the Company for all or any portion of any bonuses or incentive or equity-based compensation if the Compensation Committee in good faith determines: (a) the payment or grant was based on the achievement of certain financial results that were subsequently the subject of a material financial restatement (other than as a result of a change in accounting principles) and a lower payment or award would have occurred based upon the restated financial results; or (b) the Executive engaged in fraud or intentional misconduct related to the Company or its business. In each such instance, the Company will, to the extent practicable and allowable under applicable law, require reimbursement of any bonus or incentive or equity based compensation awarded or effect the cancellation of any unvested or deferred stock awards previously granted to the Executive in the amount by which the Executive’s bonus or incentive or equity based compensation for the relevant period exceeded the lower payment that would have been made based on the restated financial results, or such other amount as determined by the Compensation Committee, provided that the Company will not be entitled to recover bonuses or incentive or equity based compensation paid more than three years 

prior to the date the applicable restatement is disclosed. The Company agrees that the initial grant of Restricted Stock is not subject to clawback.
5.Term. The initial term of this Agreement shall commence as of March 27, 2017 (the “Effective Date”) and shall continue until March 27, 2020.  The term may be extended from year to year thereafter upon written agreement of the parties specifying the compensation arrangement for the extension period.
6.Termination:
A.This Agreement shall be terminated upon Executive’s death or upon a physician certified disability which permanently or indefinitely renders Executive unable to perform his usual duties on behalf of the Company.  In the event of a termination for death or disability, all outstanding stock options, restricted stock grants and stock appreciation rights held by Executive at the time shall become vested on a pro rata basis through the end of the last calendar month ending on or before the Termination Date (as hereinafter defined).  By way of example, if 8,000 shares of Restricted Stock are to vest on March 27, 2018 and the Termination Date is January 27, 2018 (four months after the last vesting date), then four-sixths or 5,333 of the shares of Restricted Stock to have vested on March 27, 2018, shall become vested on the January 27, 2018 Termination Date.
B.Executive may, without “Good Reason” (as defined in paragraph D below), terminate this Agreement by giving to the Company ninety (90) days prior written notice and such termination shall be effective on the date specified by Executive but in no event earlier than the ninetieth (90th) day following the date of such notice.  In such event, Executive shall continue to render his services up to the Termination Date if so requested by the Company.  In the event of such a resignation without Good Reason, all then unvested stock options, restricted stock grants and stock appreciation rights held by Executive shall be immediately forfeited.  
C.The Company may, without “Cause” (as defined in paragraph E below), terminate this Agreement at any time by giving to Executive written notice and such termination shall be effective on the date specified by the Company.  At the option of the Company, Executive shall immediately cease performing his duties hereunder upon receipt of the notice.    If terminated without Cause pursuant to this paragraph C, Executive shall be entitled to continue to participate in the Company’s fringe benefits for six (6) months following Executive’s termination and all outstanding stock options, restricted stock grants and stock appreciation rights held by Executive at the time shall become vested on a pro rata basis through the end of the last calendar month ending on or before the Termination Date.    
D.Executive may terminate this Agreement immediately for “Good Reason”.  For purposes of this Agreement, Good Reason shall be defined as (i) failure of the Company to make any payment or provide any benefit to Executive  hereunder, which failure is not cured within thirty (30) days after the Company’s receipt of written notice of such default, or (ii) a material diminution of Executive’s duties and responsibilities or his title without Executive’s consent; (iii) the imposition of a requirement on Executive  to report to a new President or to another officer unless approved by Executive, or (iv) the principal location at which Executive  is to perform his duties is relocated to a place more than fifty (50) miles from Las Vegas, Nevada.  Any termination under this paragraph D shall take effect immediately upon the Company’s receipt of written notice from Executive after the expiration of any applicable cure period.  If Executive terminates this Agreement for “Good Reason” pursuant to this paragraph D, Executive shall be entitled to continue to participate in the Company’s fringe benefits for six (6) months following Executive’s termination and all outstanding stock options, restricted stock grants and stock appreciation rights held by Executive at the time shall become vested on a pro rata basis through the end of the last calendar month ending on or before the Termination Date.  
E.The Company may terminate this Agreement immediately for “Cause”.  For purposes of this Agreement, “Cause” shall be defined as any of the following:  (i) Executive  shall commit a felony or other act involving moral turpitude, which other act is materially detrimental to the Company; (ii) Executive  shall knowingly commit any act of prohibited conduct as set forth in Item 3 of this Agreement; (iii) Executive shall commit any act, specifically including but not limited to drug or alcohol abuse, which act is materially harmful to the Company, or which in the reasonable opinion of the Company’s Board brings the Company into disrepute; (iv) Executive  shall commit any act of fraud, dishonesty, theft or misappropriation, whether or not related to his activities on behalf of the Company, including providing false reports or accounts to the Company or deliberately making false statements about the Company, its services, employees, customers or suppliers; (v) intentional or repeated material neglect of Executive’s duties; (vi) breach by Executive  of any other material provision of this Agreement; (vii) Executive shall become the subject of a bankruptcy proceeding or otherwise make an arrangement or composition with creditors generally; (viii) Executive shall engage in anti-social behavior (such as fighting, indecency, harassment, sexual or racial harassment or discrimination, intimidation of others, physical violence or assault) during the course of performing duties for the Company or against another employee outside of work; (ix) Executive shall have possession of illegal drugs at the Company’s workplace; or (x) Executive  shall perform duties in a negligent or dangerous manner which causes or is likely to cause material loss or injury.  This Agreement may not be terminated by the Company under subclause (v), (vi) or (x) of this Item unless and until the Company has provided Executive with written notice of such violative conduct and Executive  has failed to cure (or fails to commence and thereafter diligently pursue the cure) such act within thirty (30) days after Executive’s receipt of such written notice; provided, however, that no right to cure shall be available for a second or subsequent violation of the same provision within any twelve (12) month period.  Any termination under this paragraph E shall take effect immediately upon Executive’s receipt of written notice from the Company or expiration of any applicable cure period, whichever is later.  The failure of the Company to terminate this Agreement for cause as a result of any of the foregoing at any one or more times shall not affect the Company’s ability to terminate 

this Agreement for cause as a result of the subsequent occurrence of any act giving rise to “cause” hereunder, provided that Executive is still provided with a notice to cure if applicable in accordance with the above.  In the event of such a termination for Cause, all then unvested stock options, restricted stock grants and stock appreciation rights held by Executive shall be immediately forfeited.
F.Upon termination, Executive shall have no obligation to provide any additional services, and except as expressly provided above, the Company shall only be obligated to pay to Executive the portion of any amounts due as of the termination date, together with all unreimbursed out-of-pocket expenses incurred by Executive.
G.Termination of Executive’s Obligations.  Executive’s obligations under Items 7 and 8 of this Agreement shall survive the expiration of the term of this Agreement without renewal and termination of Executive’s employment as provided in such Item.
H.Resignation of Positions upon Termination.  On the termination of this Agreement for any reason whatsoever, Executive shall at the request of the Company immediately resign (without prejudice to any claims which Executive may have against the Company arising out of this Agreement or the termination thereof) from all and any offices which Executive  may hold as an officer of the Company and from all other appointments or offices which Executive  holds as a nominee or representative of the Company and if Executive  should fail to do so, the Company is hereby irrevocably authorized to appoint another person in Executive’s name and on Executive’s behalf to sign any documents or do anything necessary or requisite to effect such resignation(s) and/or transfers.
I.Termination Date.  For all purposes of this Agreement the “Termination Date” shall refer to the effective date of termination as set forth above.
7.Nonsolicitation of Employees.  As a material inducement to the Company’s employment of Executive, the provisions of this Item 7 shall apply.
A.    For purposes of this Item, the following terms and provisions shall have the following meanings:
(i)    “Prohibited Time Period” shall mean the period beginning on the date of execution hereof and ending on the date that is two (2) years after the termination of employment for any reason whatsoever of Executive.
(ii)    “Prohibited Employee” means any employee, independent contractor or consultant of the Company who worked for the Company or its subsidiaries at any time within six (6) months prior to the Determination Date.
(iii)    “Determination Date” shall mean any date as of which a determination is being made as to who is a Prohibited Employee.
B.    Executive agrees that during the Prohibited Time Period, he shall not, for any reason, without the prior written consent of the Company, on his own behalf or in the service or on behalf of others, hire any Prohibited Employee or request or induce any Prohibited Employee to terminate that person’s employment or relationship with the Company or to accept employment with any other person.
C.    The parties agree that: (i) the covenants and agreements of Executive  contained in this Item are reasonably necessary to protect the interests of the Company in whose favor said covenants and agreements are imposed in light of the nature of the Company’s business and the professional involvement of Executive  in such business; (ii) the restrictions imposed by this Item are not greater than are necessary for the protection of the Company in light of the substantial harm that the Company will suffer should Executive  breach any of the provisions of said covenants or agreements; (iii) the covenants and agreements of Executive  contained in this Item have been independently negotiated between the parties and served as a material inducement for the Company to enter into this Agreement; and (iv) the period of restriction referred to in this Item is fair and reasonably required for the protection of the Company.
D.    Executive acknowledges that a material breach by Executive of any part of this Item will result in irreparable and continuing damage to the Company and any material breach or threatened breach of the covenants provided in this Item shall be subject to specific performance by temporary as well as permanent injunction or any other equitable remedies of any court of competent jurisdiction without any requirement of the Company to post bond or prove actual economic damage.
E.    The covenants and agreements on the part of Executive contained in this Item shall be construed as agreements independent of any other agreement between Executive and the Company.  The existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of each of such covenants and agreements or otherwise affect the remedies to which the Company is entitled hereunder.

F.    If the provisions of this Item 7 should ever be adjudicated to exceed the time or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, or other limitation permitted by applicable law.
8.Confidential Information.
A.During the period beginning on the execution date of this Agreement and ending on the third (3rd) anniversary of any termination or expiration of this Agreement, Executive  agrees that he shall not, except in pursuit of the Company’s business or with the prior written consent of the Company, for his own benefit or for the benefit of any other person or entity:
(i)directly or indirectly disclose, reveal, report, duplicate or transfer any Confidential Information to any other person or entity outside of the Company;
(ii)directly or indirectly aid, encourage, direct or allow any other person or entity outside of the Company to gain possession of or access to Confidential Information;
(iii)directly or indirectly copy or reproduce Confidential Information, except as required as part of Executive’s duties; or
(iv)directly or indirectly use, sell or exploit any Confidential Information or aid, encourage, direct or allow any other person or entity to use, sell or exploit any Confidential Information.
This covenant shall not apply to any Confidential Information now or hereafter voluntarily disseminated by the Company to the public, or which otherwise has become part of the public domain through means other than a breach of Executive’s duty of confidentiality hereunder.  “Confidential Information”, for purposes of this Agreement, shall mean information of the Company that constitutes a trade secret or confidential information under Nevada law and shall include, but not be limited to,  all relevant information (whether or not reduced to writing and in any and all stages of development), concerning the Company and its services, plans, business practices, methods of operation, financial information,  names or lists of names of employees, contractors, suppliers and customers, employee compensation and benefits, other personal employee  information, interpretations, surveys, forecasts, marketing plans, development plans, notes, reports, market analyses, specialized software and databases and other information related to suppliers and customers that could be used as a competitive advantage by competitors if revealed or disclosed to such competitors or to persons or entities revealing or disclosing same to such competitors; together with any and all extracts, summaries and photo, electronic or other copies or reproductions, in whole or in part, stored in whatever medium.  Confidential Information also includes business information of the Company now known by Executive, or in Executive’s possession, or hereafter learned or acquired by Executive that derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. Confidential Information may be written or oral, expressed in electronic media or otherwise disclosed, and may be tangible or intangible. Confidential Information also includes any information made available to the Company by its customers or other third parties and which the Company is obligated to keep confidential.  Executive acknowledges that the Confidential Information is secret, confidential and proprietary to the Company and has been or will be disclosed to and/or obtained by Executive in confidence and trust for the sole purpose of using the same for the sole benefit of the Company.  
B.Executive  hereby acknowledges and agrees that (i) the Company has expended considerable and substantial time, effort and capital resources to develop the Confidential Information, (ii) the Confidential Information is innovative and must receive confidential treatment to protect the Company's competitive position in the market and the Company's proprietary interest therein from irreparable damage, (iii) Executive, by virtue of his relationship with the Company, has had and will have access to the Confidential Information, and (iv) the Confidential Information and all physical embodiments or other repositories of the same shall be and at all times remain the sole and exclusive property of the Company.
C.Since irreparable harm will otherwise result to the Company in the event of a breach or threatened breach by Executive of the provisions of Item 8A, the Company shall be entitled to an injunction restraining Executive from disclosing, in whole or in part, any Confidential Information, or from rendering any services to any person, firm, company, association or other entity to whom such Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed.  Executive waives any requirement for the Company to post a bond or prove actual economic damage prior to seeking injunctive relief.
9.Company Property.
A.Executive acknowledges that all recorded information, including without limitation all notes, memoranda, records, laboratory reports, documents, papers, computer disks, tapes or other storage media and all other papers and documents whatsoever which may have been prepared by Executive or have come into Executive’s possession or control in the course of employment with the Company (the “Documents”) and other materials owned or used by the Company shall at all times remain the sole property of the Company.
B.Executive agrees to promptly, upon request of the Company and in any event upon the termination of Executive’s employment with the Company for any reason whatsoever, forthwith return to the Company all property whatsoever belonging to the Company including, without limitation, any laptop computer belonging to the Company, security passes, credit 

cards and all copies of the Documents which have come into Executive’s possession or control in the course of employment with the Company and Executive  shall not be entitled to and shall not retain any copies thereof.
10.Professional Responsibility.
A.Executive agrees that he will provide in connection with the performance of all services under this Agreement the skill and diligence normally provided by competent professionals in the performance of services similar to that contemplated by this Agreement.
B.Both parties acknowledge and agree that a fiduciary and confidential relationship has commenced and will continue to exist between them and that said relationship will continue during the term of this Agreement.
C.Executive represents that he has no conflicts of interest in rendering his professional services to the Company.
D.Executive shall not during the course of his employment (except as a representative or nominee of the Company or otherwise with the prior consent in writing of the Board) be directly or indirectly engaged, concerned or interested in any other business which: (i) is wholly or partly in competition with any business carried on by the Company by itself or in partnership, common ownership or as a joint venture with any third party; or (ii) is a supplier to or customer of the Company, provided that Executive may own not more than one percent (1%) of the issued shares of any company which is publicly held and listed on a national stock exchange or on the Nasdaq Stock Market.
E.Subject to any regulations from time to time issued by the Company, Executive shall not receive or obtain directly or indirectly any discount, rebate, commission or other inducement in respect of any sale or purchase of any goods or services effected or other business transacted (whether or not by Executive) by or on behalf of the Company and if Executive (or any firm or company in which Executive is directly or indirectly engaged, concerned or interested) shall obtain any such discount, rebate, commission or inducement, Executive  shall account to the Company for the amount received by Executive or the amount received by such firm or company.
F.As an inducement to the Company to enter into this Agreement, Executive  represents and warrants that: (i) he is not a party to any other agreement or obligation for personal services; (ii) there exist no impediments or restraints, contractual or otherwise, on Executive’s power, right or ability to enter into this Agreement and to perform his duties and obligations hereunder; (iii) the performance of his obligations under this Agreement do not and will not violate or conflict with any agreement relating to confidentiality, non-competition or exclusive employment to which Executive  is or was subject; and (iv) Executive has not been involved in any legal proceedings that would be required to be disclosed in response to Item 401(f) of Regulation S-K promulgated under the Securities Act of 1933, as amended.  As an inducement to Executive  to enter into this Agreement, the Company represents and warrants that there exist no impediments or restraints, contractual or otherwise, on the Company’s power, right or ability to enter into this Agreement and to perform its duties and obligations hereunder.
11.Ownership Of Works and Materials.
A.    Executive agrees that all Works (as defined below) and Materials (as defined below) are the sole and exclusive property of the Company.
B.    Executive also specifically acknowledges and agrees that any tangible expression of any Works or Materials were developed, made or invented exclusively for the benefit of and are the sole and exclusive property of the Company or its successors and assigns as “works for hire” under Section 201 of Title 17 of the United States Code.
C.    In the event that any Works or Materials are deemed not to be a work for hire, Executive agrees to assign, and does hereby irrevocably assign, to the Company all of his right, title and interest in and to such Works and Materials.  Executive further agrees to take any actions, including the execution of documents or instruments, which the Company may reasonably require to effect Executive’s assignment of rights pursuant to this Item 11C, and Executive hereby constitutes and appoints, with full power of substitution and resubstitution, the Company as Executive’s attorney-in-fact to execute and deliver any documents or instruments which Executive has agreed to execute and deliver pursuant to this Item 11C.
D.    Executive hereby waives and releases in favor of Company all rights in and to the Works and Materials and agrees that Company shall have the right to revise, condense, abridge, expand, adapt, change, modify, add to, subtract from, re-title or otherwise modify the Works and Materials without Executive’s consent.
E.    For purposes of this Item 11, “Works” means any work, studies, reports or analyses devised, developed, designed, formulated or reduced to writing by Executive at any time while Executive is or has been employed by the Company, including, without limitation any and all compositions or works of authorship, concepts, compilations, abridgments, or other form in which Executive may directly or indirectly recast, transform or adapt any of the foregoing.
F.    For purposes of this Item 11, “Materials” means any product, model, document, instrument, report, plan, proposal, specification, manual, tape, and all reproductions, copies or facsimiles thereof, or any other tangible item which in whole or in part contains, embodies or manifests, whether in printed, handwritten, coded, magnetic, digital or other form, any Works.

G.    In order to avoid any ambiguity in connection with the creation of any Work which Executive claims is not covered by this Agreement, Executive agrees to disclose in writing to the Company complete details on any Works that are devised, developed, designed, formulated or reduced to writing by Executive at any time while Executive is or has been employed by the Company.  Such disclosure shall be made promptly upon development, design or formulation with respect to any Works created while Executive is employed by the Company, and shall be disclosed in writing pursuant to such form as the Company may from time to time provide.
12.Business Opportunities. For so long as Executive is employed by the Company, Executive will not, without the prior written consent of the Company (which consent may be withheld by the Company in the exercise of its absolute discretion), engage, directly or indirectly, in any business, venture or activity that Executive is aware or reasonably should be aware that the Company or any affiliate of the Company is engaged in, intends at any time to become engaged in, or might become engaged in if offered the opportunity, or in any other business, venture or activity if the Company reasonably determines that such activity would adversely affect the business of the Company or any affiliate thereof or the performance by Executive of any of Executive’s duties or obligations to the Company.
13.Privacy Waivers.  
A.The Company reserves the right to stop and search any employee or property of any employee when entering or leaving the Company’s premises.
B.The Company reserves the right to monitor at any time telephone calls, electronic communications and information transmitted on Company networks or on computer equipment which is owned by the Company or on computers on Company premises that are used for Company business.
14.Notice.  All notices required or sent hereunder shall be sent by personal delivery, overnight priority mail via a nationally recognized overnight delivery company, or by certified mail, return receipt requested to the address of the party entitled to receive the notice as set forth above.  Notices sent in accordance with this paragraph shall be deemed received upon personal delivery, one (1) business day after delivery to a nationally recognized overnight delivery company or five (5) days after mailed, as aforesaid.
15.Breach by the Company.  If there is a dispute regarding the payment of any sum by the Company hereunder, the Company shall not be deemed to have failed to have made a payment hereunder if pending the resolution of such dispute, the Company pays the amount in dispute into court or into an escrow account at the Company’s bank or with the Company’s counsel.
16.Remedies Not Exclusive.  The rights, remedies and benefits herein expressly specified are cumulative and not exclusive of any rights, remedies or benefits which any party may otherwise have.
17.Invalid Provisions.  The invalidity of any one or more of the clauses or words contained in this Agreement shall not affect the reasonable enforceability of the remaining provisions of this Agreement, all of which are inserted herein conditionally upon being valid in law; and in the event that one or more of the words or clauses contained herein shall be invalid, this instrument shall be construed as if such invalid words or clauses had not been inserted or, alternatively, said words or clauses shall be reasonably limited to the extent that the applicable court interpreting the provisions of this Agreement considers to be reasonable.
18.Binding Effect.  This Agreement, as it relates to restrictions applicable to Executive, is a personal contract and the rights and interests of Executive hereunder may not be sold, transferred, assigned, pledged or hypothecated.  However, this Agreement shall inure to the benefit of and be binding upon Company and its successors and assigns including, without limitation, any corporation or other entity into which Company is merged or which acquires all or substantially all of the outstanding ownership interests or assets of Company.  
19.Jurisdiction.  Each of the undersigned further agrees that any action or proceeding brought or initiated in respect of this Agreement may be brought or initiated in the United States District Court for the State of Nevada or in any District Court located in Clark County, Nevada, and each of the undersigned consents to the exercise of personal jurisdiction and the placement of venue in any of such courts, or in any jurisdiction allowed by law, in any such action or proceeding and further consents that service of process may be effected in any such action or proceeding in the manner provided in Section 14.065 of the Nevada Revised Statutes or in such other manner as may be permitted by law.  Each of the undersigned further agrees that no such action shall be brought against any party hereunder except in one of the courts above named.
20.Attorney’s Fees.  In the event an action is taken by either party to enforce this Agreement or resolve a dispute in connection herewith, the prevailing party shall be entitled to recover the costs incurred with the prosecution and defense of such action, including reasonable attorney’s fees.
21.Miscellaneous.  This Agreement shall be construed under and governed by the laws of the State of Nevada other than its conflicts of laws principles.  This Agreement contains the complete understanding of the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, understandings and negotiations relating to the same subject matter.  This Agreement may only be modified by a written instrument signed by each of the parties hereto.  No provisions of this Agreement will be interpreted in favor of, or against, any of the parties hereto by reason of the extent to which any such party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof.  Failure to require strict compliance with any term or provision of this Agreement shall not constitute a waiver of a party’s right to insist upon strict compliance with each and every provision of this Agreement.  No waiver of any terms and conditions of this Agreement shall be deemed to be a waiver of any subsequent breach of that or any other term of condition.  This 

Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and same instrument.  The provisions of Item 3 (the last paragraph), 4L, 6H, 7, 8, 9, 11 and 14 through 21 shall survive the termination of this Agreement and Executive’s employment with the Company.  This Agreement may be executed by any party by delivery of a facsimile or pdf signature, which signature shall have the same force as an original signature.  Any party which delivers a facsimile or pdf signature shall promptly thereafter deliver an originally executed signature to the other party; provided, however, that the failure to deliver an original signature page shall not affect the validity of any signature 

delivered by facsimile or pdf. The paragraph headings contained in this Agreement are for reference only and shall not be deemed to impart substantive meeting to any provision of this Agreement.  Each party has had the opportunity to be represented by counsel of its choice in negotiating this Agreement.  This Agreement shall therefore be deemed to have been negotiated and prepared at the joint request and direction of the parties, at arm’s length, with the advice and participation of counsel, and shall be interpreted in accordance with its terms and without favor to any party.

IN WITNESS WHEREOF, this Agreement has been signed, sealed and delivered as of the date and year first above written.

EXECUTIVE:

/s/ M. Ponder Harrison    
M. PONDER HARRISON

COMPANY:

ALLEGIANT TRAVEL COMPANY

By: /s/John Redmond    

Title: President

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