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PROMISSORY NOTE AND WARRANT EXCHANGE AGREEMENT
THIS PROMISSORY NOTE AND WARRANT EXCHANGE AGREEMENT (this “Agreement”), dated as
of March 31, 2016
BY AND BETWEEN:
The Alkaline Water Company Inc., a Nevada corporation
(the “Company”)
AND:
each of the holders of the Company’s promissory notes and warrants set forth on
the signature pages hereto
(each, a “Holder” and collectively, the “Holders”)
WHEREAS:
A.
In connection with a series of loan transactions, the Company issued promissory
notes (the “Notes”) and warrants (the “Warrants”) to purchase shares of the
Company’s common stock (the “Common Stock”) to the lenders in such loan
transactions;

B.
Each Holder owns the Note and Warrants listed on such Holder’s signature page
and the Company and such Holder wish to exchange, for no additional
consideration, such Holder’s Note and Warrants for the number of shares of
Common Stock that is listed on such Holder’s signature page (such shares, the
“Exchange Shares” and such exchange of Notes and Warrants for Exchange Shares,
the “Exchange”);

C.
Following the Exchange, the Notes and Warrants shall be automatically cancelled
and terminated and the Holders shall have no further rights pursuant to the
Notes and Warrants and any agreement or instrument pursuant to which such Notes
and Warrants were issued; and

D.
The Exchange is being made in reliance upon the exemption from registration
provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”).

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1.
The Exchange

At the Closing (as defined below), the Company and the Holders shall, pursuant
to Section 3(a)(9) of the Securities Act, exchange the Note and the Warrants for
Exchange Shares, as follows:
(a)
Closing. The closing of the Exchange (the “Closing”) shall occur on or before
March 31, 2016 or on such other date to be determined by the Company in its sole
discretion. The Holders understand that this Agreement is not binding on the
Company until the Company accepts it, which acceptance is in the Company’s sole
discretion, by executing this Agreement where indicated.

 

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(b)
Exchange Shares. The Holders shall receive the number of Exchange Shares, as set
forth on the Holder’s signature pages.

(c)
Consideration. At the Closing, the Exchange Shares shall be issued to each
Holder in exchange for such Holder’s Note and Warrants without the payment of
any other consideration by such Holder. Each Holder hereby agrees that, upon and
subject to the Closing, all of the Company’s obligations under the terms and
conditions of such Holder’s Note and Warrants and any agreement or instrument
pursuant to which such Note and Warrants were issued shall be automatically
terminated and cancelled in full without any further action required, and that
this Section 1(c) shall constitute an instrument of termination and cancellation
of such Note, Warrants, agreements or instruments.

(d)
Delivery. In the Exchange, the Company shall, at the Closing, issue the Exchange
Shares to each Holder. Each Holder shall deliver or cause to be delivered to the
Company (or its designee), within five (5) trading days after the Closing, the
original Note and Warrants. For the avoidance of doubt, as of the Closing all of
the Holders’ rights under the terms and conditions of the Notes and Warrants and
any agreement or instrument pursuant to which such Notes and Warrants were
issued shall be extinguished.

(e)
Other Documents. The Company and the Holders shall execute and/or deliver such
other documents and agreements as are reasonably necessary to effectuate the
Exchange pursuant to the terms of this Agreement.

2.
Representations and Warranties

(a)
Holders’ Representations and Warranties. Each Holder hereby represents and
warrants to the Company that:

(i)
such Holder is either an individual or an entity validly existing and in good
standing under the laws of the jurisdiction of such Holder’s organization;

(ii)
this Agreement has been duly authorized, validly executed and delivered by such
Holder and is a valid and binding agreement and obligation of such Holder
enforceable against such Holder in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and such
Holder has full power and authority to execute and deliver this Agreement and
the other agreements and documents referred to in Section 1(e) and to perform
such Holder’s obligations hereunder and thereunder;

(iii)
such Holder understands that the Exchange Shares are being offered, sold, issued
and delivered to such Holder in reliance upon specific provisions of federal and
applicable state securities laws, and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Holder set forth herein for purposes of qualifying for
exemptions from registration under the Securities Act and applicable state
securities laws;

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(iv)
such Holder is not acquiring the Exchange Shares as a result of any
advertisement, article, notice or other communication regarding the Exchange
Shares published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement;

(v)
such Holder, either alone or together with such Holder’s representatives, has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the prospective
investment in the Exchange Shares, and has so evaluated the merits and risks of
such investment and such Holder is able to bear the economic risk of an
investment in the Exchange Shares and, at the present time, is able to afford a
complete loss of such investment;

(vi)
at the time such Holder was offered the Exchange Shares, such Holder was, and as
of the date hereof, such Holder is, and at the Closing, such Holder will be  an
“accredited investor” as defined in Rule 501(a) under the Securities Act;

(vii)
such Holder acknowledges that the offer, sale, issuance and delivery of the
Exchange Shares to such Holder is intended to be exempt from registration under
the Securities Act, by virtue of Section 3(a)(9) thereof and such Holder
understands that the Exchange Shares may be sold or transferred only in
compliance with all federal and applicable state securities laws;

(viii)
such Holder understands that the Exchange Shares are “restricted securities” and
have not been registered under the Securities Act or any applicable state
securities law and such Holder is acquiring the Exchange Shares as principal for
such Holder’s own account and not with a view to or for distributing or
reselling such Exchange Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, has no present intention
of distributing any of such Exchange Shares in violation of the Securities Act
or any applicable state securities law and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the
distribution of such Exchange Shares in violation of the Securities Act or any
applicable state securities law (this representation and warranty not limiting
such Holder’s right to sell the Exchange Shares in compliance with applicable
federal and state securities laws); and

(ix)
such Holder owns and holds, beneficially and of record, the entire right, title,
and interest in and to such Holder’s Note and Warrants free and clear of all
rights and Encumbrances (as defined below). Such Holder has full power and
authority to transfer and dispose of the Note and Warrants to the Company free
and clear of any right or Encumbrance. Other than the transactions contemplated
by this Agreement, there is no outstanding vote, plan, pending proposal, or
other right of any person to acquire all or any of the Note and Warrants. As
used herein, “Encumbrances” shall mean any security or other property interest
or right, claim, lien, pledge, option, charge, security interest, contingent or
conditional sale, or other title claim or retention agreement, interest or other
right or claim of third parties, whether perfected or not perfected, voluntarily
incurred or arising by operation of law, and including any agreement (other than
this Agreement) to grant or submit to any of the foregoing in the future. The
Note and Warrants set forth opposite such Holder’s name on such Holder’s
signature page constitutes all of the Note and Warrants owned or held of record
or beneficially owned or held by such Holder.

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(b)
Company Representations and Warranties. The Company hereby represents and
warrants to the Holders that:

(i)
the Exchange Shares have been duly authorized by all necessary corporate action,
and, when issued and delivered in accordance with the terms hereof, the Exchange
Shares shall be validly issued and outstanding, fully paid and non‑assessable,
and, except as otherwise set forth herein, free and clear of all liens,
encumbrances and rights of refusal of any kind;

(ii)
this Agreement has been duly authorized, validly executed and delivered on
behalf of the Company and is a valid and binding agreement and obligation of the
Company enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver this Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder;

(iii)
the Company represents that it has not paid, and shall not pay, any commissions
or other remuneration, directly or indirectly, to any third party for the
solicitation of the Exchange contemplated by this Agreement. Other than the
exchange of a Holder’s Note and Warrants, the Company has not received and will
not receive any consideration from such Holder for the Exchange Shares to be
issued to such Holder pursuant to this Agreement;

(iv)
the Company has not, nor has any person acting on its behalf, directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the Exchange and the
issuance of the Exchange Shares pursuant to this Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act which would
prevent the Company from delivering the Exchange Shares to each Holder pursuant
to Section 3(a)(9) of the Securities Act, nor will the Company take any action
or steps that would cause the Exchange, issuance and delivery of the Exchange
Shares to be integrated with other offerings to the effect that the delivery of
the Exchange Shares to the Holders would be seen not to be exempt pursuant to
Section 3(a)(9) of the Securities Act; and

(v)
for the purposes of Rule 144 of the Securities Act, the Company acknowledges
that the holding period of the Exchange Shares may be tacked onto the holding
period of the Notes and Warrants, as applicable, pursuant to Rule 144(d)(3)(ii).

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3.
Miscellaneous

(a)
Entire Agreement. This Agreement constitutes the entire agreement, and
supersedes all other prior and contemporaneous agreements and understandings,
both oral and written, between the Holders and the Company with respect to the
subject matter hereof.

(b)
Amendment. This Agreement may only be amended with the written consent of the
Holders and the Company.

(c)
Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Holders or the Company shall bind and inure to the benefit of
their respective successors and assigns.

(d)
Applicable Law; Consent to Jurisdiction. The validity, interpretation and
performance of this Agreement shall be governed in all respects by the laws of
the State of Nevada, without giving effect to conflicts of law principles that
would result in the application of the substantive laws of another jurisdiction.
Each of the parties hereby agrees that any action, proceeding or claim against
it arising out of or relating in any way to this Agreement shall be brought and
enforced in the courts in the State of Arizona, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. Each party hereby waives
any objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.

(e)
Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall be deemed to be one
and the same agreement. A signed copy of this Agreement delivered by facsimile,
e-mail or other means of electronic transmission shall be deemed to have the
same legal effect as delivery of an original signed copy of this Agreement.

(f)
Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.

(g)
No Commissions. Neither the Company nor any Holder has paid or given, or will
pay or give, to any person, any commission, fee or other remuneration, directly
or indirectly, in connection with the transactions contemplated by this
Agreement.

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IN WITNESS WHEREOF, this Promissory Note and Warrant Exchange Agreement has been
duly executed by the undersigned as of the date first written above.
THE ALKALINE WATER COMPANY INC.

By:  
 ________________________________________
                Authorized Signatory

 ________________________________________
                Name:    

 ________________________________________
                Title:   

 
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HOLDER SIGNATURE PAGE TO PROMISSORY NOTE AND WARRANT EXCHANGE AGREEMENT
WITH THE ALKALINE WATER COMPANY INC.
IN WITNESS WHEREOF, this Promissory Note and Warrant Exchange Agreement has been
duly executed by the undersigned as of the date first written above.
 
Name of Holder:
_____________________________________________________________________________
 
Signature of Authorized Signatory of Holder:
_______________________________________________________
 
Name of Authorized Signatory:
__________________________________________________________________
 
Title of Authorized Signatory:
___________________________________________________________________
 
Email Address of Holder:
_______________________________________________________________________
 
Phone Number of Holder:
______________________________________________________________________
 
Registration Name and Address for Exchange Shares:
 
   
___________________________________________________________________________________________
 
___________________________________________________________________________________________
 
___________________________________________________________________________________________
 
Tax ID# or SSN:
______________________________________________________________________________
 
Address for Delivery of Exchange Shares for Holder (if not same as above):
 
___________________________________________________________________________________________
 
___________________________________________________________________________________________
 
___________________________________________________________________________________________
 

 
 
ISSUE DATE OF NOTE:

__________________________________________
 
PRINCIPAL AMOUNT OF NOTE:

_______________________________

ISSUE DATE OR INITIAL EXERCISE DATE OF WARRANTS:

__________________________________________ 
 
NUMBER OF WARRANTS:

_______________________________ 

NUMBER OF EXCHANGE SHARES TO BE ISSUED

__________________________________________ 

 
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